NAREDCO sets up finance committee to help builders procure funds from banks, NBFCs

(Representational image)

The National Real Estate Development Council (NAREDCO), an apex body formed under the aegis of the Ministry of Housing and Urban Affairs, said on October 21 that it has set up a committee that will enable member developers to easily access funds from banks and financial institutions based on merit and viability of the projects.

The NAREDCO Finance Committee (NFC) will facilitate its members to access funds while matching their financing requirements with the banks, financial institutions and Non-Banking Financial Companies lending to the real estate sector.

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The NFC was launched on the sidelines of NAREDCO 24th Annual General Meeting held at New Delhi.

Merchant bankers Resurgent India will be actively associated with the NFC. The NFC will also support large-scale projects to access funds via financial institutions and educate members about the ways to enhance their credit ratings, NAREDCO said in a statement.

NAREDCO members can apply online and submit their application for facilitation and funding assistance. The Committee and NAREDCO have partnered with financial institutions to limit the processing and in-principle approval time to 15-30 days for an application, NAREDCO said.

There would also be a provision to waive the processing fee. “The Committee will help in several other ways, including a provision for waiving the processing fee, award of concession on the applicable interest rate, and quick project approvals for financing with minimum documentation,” it said.

"While on one hand, we wish to help the industry and developers and infuse liquidity into the system, we plan to help the consumers too with ready-to-move-in projects," said Rajan Bandelkar, National President, NAREDCO.

The industry continues to face a liquidity crunch and NAREDCO hopes to make it a better-designed and organised sector soon, said Satish Kumar, Chairman, NAREDCO Finance Committee.

The newly-formed committee will focus on project financing, which would fulfil the practical requirements of construction by adhering to the construction cycle, Kumar said.

"As the Committee possesses a definite knowledge of financing policies and schemes of the governments and institutions for the real estate sector in India, builders seeking financial assistance would get facilitated with all the updates on the latest schemes of the central and state governments as well as financial institutions," said Parveen Jain, Chairman, NAREDCO.

Developers, especially those in tier 2 and 3 cities can benefit from the financial literacy the NFC will provide, said Niranjan Hiranandani, Vice Chairman, NAREDCO. It will also act as a platform to showcase real estate-specific schemes through online sessions and webinars, roadshows and knowledge-based industry seminars, he added.