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RBI relief for realty: No downgrade of commercial loan if delay genuine

RBI will issue revised regulations for housing finance companies (HFCs ) by the end of Feb.

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Last Updated: Feb 06, 2020, 12.44 PM IST
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The development would complement the initiatives taken by the government to revive the real estate sector.
NEW DELHI: The Reserve Bank of India (RBI) on Thursday said it will not downgrade commercial real estate loans, if the delay is genuine. It will be in line with the treatment accorded to other project loans for the non-infrastructure sector.

The RBI said it will issue revised regulations for housing finance companies (HFCs ) by the end of February. Till such time HFCs will continue to comply with the directions and instructions issued by NHB, it said.

Since August 9, the regulation of HFCs has been transferred from National Housing Bank (NHB) to Reserve Bank. The RBI is carrying out a review of the extant regulatory framework applicable to HFCs.

“It has been decided to permit extension of date of commencement of commercial operations (DCCO) of project loans for commercial real estate, delayed for reasons beyond the control of promoters, by another one year without downgrading the asset classification,” RBI said.

The detailed instructions will be issued shortly, the apex bank said.

The development would complement the initiatives taken by the government to revive the real estate sector.

Brigade Enterprises (up 3.19 per cent), SOBHA (up 1.54 per cent), Godrej Properties (up 1.22 per cent), Oberoi Realty (up 1.18 per cent), Phoenix Mills (up 0.82 per cent), Prestige Estates Projects (up 0.49 per cent) and Sunteck Realty (up 0.24 per cent) were among the top gainers in the Nifty Realty index.

While DLF (down 1.22 per cent), Indiabulls Real Estate (down 0.44 per cent) and Mahindra Lifespace Developers (down 0.11 per cent) were the top losers.

The Nifty Realty index was trading 0.29 per cent up at 327.35 around 12:09 pm.

In its policy meet today, the six-member monetary policy committee (MPC) on Thursday decided to keep its short-term lending rate -- repo rate rate -- unchanged at 5.15 per cent in the sixth bimonthly policy review of the ongoing financial year.

RBI maintained its accommodative stance to support growth and said there is policy space available for future actions.

All six committee members voted in favour of the status quo. In the December policy review also, all members had voted in favour of keeping rates steady.
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