Real estate developers have urged Finance Minister Nirmala Sitharaman to direct the Reserve Bank of India to implement the one-time rollover of disbursed project loans by banks and financial institutions and have called for last-mile funding to complete stalled projects.
A delegation of developers’ body NAREDCO led by RK Arora, chairman Supertech Group and president, NAREDCO, met Finance Minister Nirmala Sitharaman on July 15 and submitted a memorandum of these demands.
The body has also demanded extending suspension of some provisions of insolvency law by one more year.
Arora said the delegation informed the finance minister about the liquidity crisis being faced by the real estate sector due to the impact of the COVID-19 pandemic and the prolonged lockdown.
All the real estate projects are on the brink of collapse and unless the government supports the industry, the project implementation will come to a standstill, Arora said.
The delegation also urged the finance minister to direct existing lender banks to provide last-mile funding on the lines of the SWAMIH AIF.
There are more than 4,000 projects all over the country that require last-mile funding. Since the existing lenders are not releasing their charge against existing loans and not giving NOC, the developers are deprived of the benefit of the announced SWAMIH Alternative Investment Fund, it said.
The finance minister was informed of the problems being faced by Real Estate Sector due to the proceedings being initiated against them under Sections 7, 9 and 10 of the Insolvency & Bankruptcy Code 2016 (IBC). In March 2020, the enforcement of these sections was suspended for a period of one year until March 2021.
"Since the second wave of COVID-19 has affected all the real estate projects in a much large scale, more than the first wave, it is necessary that time extension for implementation of IBC be allowed for further one year," Arora said.
The finance minister assured the delegation to consider these demands sympathetically, the association said.