07 - 08 - 2020

CREDAI Bengal Daily News Update | 07.08.20

Monetary Policy: RBI's loan restructuring move to provide

breather to real estate

“While the sector was looking at a further revision in the policy rate, to boost demand, we

appreciate the accommodative stance by the RBI, in the wake of a high rate of inflation

which may have necessitated keeping policy rates unchanged,” said Shishir Baijal,

Chairman and Managing Director, Knight Frank India.

The Reserve Bank of India’s decision to extend a one-time restructuring term loans with up to 2

years moratorium is expected to provide a breather to stressed real estate developers and

individual borrowers in the housing segment alike.

The one-time restructuring of loans without classifying them as non-performing assets (NPAs)

will be based on the recommendation of the expert committee steered by KV Kamath, said the

central bank.

“While the sector was looking at a further revision in the policy rate, to boost demand, we

appreciate the accommodative stance by the RBI, in the wake of a high rate of inflation which

may have necessitated keeping policy rates unchanged,” said Shishir Baijal, Chairman and

Managing Director, Knight Frank India.

The central bank has also announced further liquidity infusion to the tune of Rs 5000 Crores to

National Housing Board (NHB) which should be able to provide some relief during these times

of crisis.

“Opening up the window for restructuring of loans to companies, individuals and MSME under

mandated safeguards grants breather to the liquidity strapped industry. A flexible repayment

scheme under the new resolution framework shall bring in the much-needed relief to resume

operations smoothly,” said Niranjan Hiranandani President – Assocham and Naredco.

The enhanced finance flow should see developers in need of last mile funding being able to

complete their stalled projects.

“It will help infuse capital into the HFCs and eventually provide relief to developers battling

liquidity issues in COVID-19 times,” said Anuj Puri, Chairman – ANAROCK Property

Consultants

The RBI governor revealed that real GDP of India will trend in the negative territory for

majority of FY 20 – 21, which causes concern for the real estate sector as economic growth and

stability is a key ingredient for its long-term growth.

Newspaper/Online Economic Times ( online )

Date August 06, 2020

Link https://economictimes.indiatimes.com/industry/services/property-/-

cstruction/monetary-policy-rbis-loan-restructuring-move-to-provide-breather-to-

real-estate/articleshow/77390249.cms

“The real estate sector too is yet to see the full swing impact of measures announced earlier.

One-time restructuring of loan would have given the much needed respite to the real estate

sector which has been facing headwinds due to the pandemic,” said Ramesh Nair, CEO and

Country Head (India), JLL.

The real estate sector saw a decline in the first half of 2020 in residential sales across the top

seven cities while launches remained constrained on the back of bleak economic environment

and muted consumer sentiment. According to Knight Frank, Launches were down 46% to

60,489 units compared to the same period, year earlier, while sales tanked 54% to 59,538 units.

____________________________________________________________________________________________

RBI provides additional liquidity facility of Rs 5,000 crore to NHB

In its third bi-monthly monetary, the central bank has decided to keep the repo rate

unchanged at 4 per cent. It also kept the reserve repo rate remain at 3.35 per cent.

The Reserve Bank of India (RBI) on Thursday provided an additional standing liquidity facility

(ASLF) of Rs 5,000 crore to National Housing Bank (NHB). This is over and above Rs 10,000

crore already provided for supporting housing finance companies (HFCs).

The facility will be for a period of one year and will be charged at the RBI’s repo rate.

ASLF is being provided to shield the housing sector from liquidity disruptions and augment the

flow of finance to the sector through housing finance companies (HFCs), said Shaktikanta Das,

governor, RBI.

In its third bi-monthly monetary, the central bank has decided to keep the repo rate unchanged

at 4 per cent. It also kept the reserve repo rate remain at 3.35 per cent. The pause has come after

two consecutive rate cuts.

The Marginal Standing Facility (MSF) rate and the Bank rate remain unchanged at 4.25 per

cent.

Net foreign direct investment (FDI) moderated to US$ 4.4 billion in April-May 2020 from US$

7.2 billion a year ago.

For the year 2020-21 as a whole, real GDP growth is also estimated to be negative.

The economic fallout on account of the COVID-19 pandemic has led to significant financial

stress for a number of borrowers across the board. The resultant stress can potentially impact

the long-term viability of a large number of firms, otherwise having a good track record under

the existing promoters, due to their debt burden becoming disproportionate, relative to their

cash flow generation abilities.

RBI hence decided to provide a window under the Prudential Framework to enable the lenders

to implement a resolution plan in respect of eligible corporate exposures without change in

ownership, and personal loans, while classifying such exposures as standard subject to specified

conditions.

Newspaper/Online ET Realty ( online )

Date August 06, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/rbi-provides-

additional-liquidity-facility-of-rs-5000-crore-to-nhb/77388436

The framework shall not be available for exposures to financial sector entities as well as central

and state governments, local government bodies (e.g. Municipal Corporations).

________________________________________________________________

Canara Bank slashes MCLR by up to 30 bps across various tenors

The six-month MCLR has been cut to 7.40 per cent from 7.50 per cent, the bank

said. The one-year MCLR has been revised to 7.45 per cent from 7.55 per cent

earlier.

State-owned Canara Bank on Thursday slashed its marginal cost of fund-based lending

rate (MCLR) by up to 30 basis points across various tenors. The overnight and one-

month lending rates have been cut by 20 basis points (bps) to 7 per cent each. The three-

month MCLR has been revised to 7.15 per cent from 7.45 per cent, Canara Bank said in

a regulatory filing.

The six-month MCLR has been cut to 7.40 per cent from 7.50 per cent, the bank said.

The one-year MCLR has been revised to 7.45 per cent from 7.55 per cent earlier.

The revised lending rates will be effective from August 7, Canara Bank said.

The reduction in MCLR will bring down burden on borrowers.

The Reserve Bank of India (RBI) on Thursday kept the interest rates unchanged, but

maintained an accommodative stance, implying more rate cuts in future if the need

arises to support the economy hit by the COVID-19 crisis.

The benchmark repurchase (repo) rate has been left unchanged at 4 per cent, Governor

Shaktikanta Das said while announcing the decisions taken by the central bank's

Monetary Policy Committee.

________________________________________________________________

Newspaper/Online ET Realty ( online )

Date August 06, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/canara-bank-slashes-

mclr-by-up-to-30-bps-across-various-tenors/77392373

'Setbacks' relaxed for non-residential buildings in Delhi

While officials argue that the new norms will help in maximum utilisation of space and

prevent sealing action in the future, some believe that it will defeat the very purpose of

leaving setbacks.

Urban growth is likely to get denser in the coming days as building norms have been relaxed to

allow the use of setback areas for installing ATMs, guard rooms and washrooms.

These relaxations will, however, be applicable only in non-residential buildings located in an

area of more than 3,000 square metres, a senior South Delhi Municipal Corporation official

said.

In building and zonal planning, setbacks are meant to provide a space between different land

uses and structures. They are designed to protect the structures and improve the quality of life.

The purpose is to ensure that one structure does not affect the neighbour’s right to ventilation,

sunlight and vehicular access.

While officials argue that the new norms will help in maximum utilisation of space and prevent

sealing action in the future, some believe that it will defeat the very purpose of leaving setbacks.

“The new norms will help in utilisation of space for setting up facilities like washrooms and

guard rooms. Other facilities like ATM kiosks can come up but a maximum limit of 9 sq m can

be used for setting up such kiosks,” the official explained.

Another civic official said that Delhi Development Authority had cleared these changes, which

are now part of the unified building bylaws. “Such constructions will not be considered

unauthorised and will not invite sealing or penalty,” the official explained, adding that the

master plan makes it mandatory for bigger plots to leave the setback area that provides

breathing space between buildings and also space, in case of emergency like a fire. “A condition

has been incorporated in the amended bylaws that these utilities should in no way hinder the

movement of fire emergency vehicles,” he added.

With the passage of time, various commercial buildings have added such additional

constructions due to lack of space in their building complexes, many of which were sealed in

2018. “We had received inputs from various stakeholders after which the issue was raised in the

meeting of the DDA technical committee and the changes were incorporated,” the civic official

Newspaper/Online ET Realty ( online )

Date August 07, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/setbacks-relaxed-for-

non-residential-buildings-in-delhi/77406192

said. The move is likely to help in desealing portions of many such buildings.

The new norms also state the interior open-to-sky roof portion of a building can be covered with

removable material. “Interior open-to-sky areas shall be allowed to cover with retractable

roofing at the terrace-level or at minimum double height to prevent climatic effects,” the

regulations stated.

The area below the covered portion can be used as landscaped area, public space, but not for

any commercial purpose, the official claimed.

________________________________________________________________

Chandigarh's costliest housing scheme faces closure

The Chandigarh Housing Board (CHB) had submitted a revised proposal before the

administration to revive scheme that was offering three bedroom-hall-kitchen (BHK) flat

for Rs 1.5 crore.

A second rejection from the UT administration to increase the floor area ratio (FAR) of the

city’s costliest housing scheme planned in Sector 53 has almost spelt its death.

The Chandigarh Housing Board (CHB) had submitted a revised proposal before the

administration to revive scheme that was offering three bedroom-hall-kitchen (BHK) flat for Rs

1.5 crore. The matter will now come up for discussion in CHB’s meeting on August 6.

Last month, the architect department of the administration had also refused to accept the

proposal of the CHB.

In its fresh proposal, the CHB had submitted to make it affordable, there was an urgent need to

increase FAR. By offering more space in flats, buyers would be interested in the scheme that

could evoke good response, the CHB had submitted.

In March, the board had scrapped the scheme, deciding to refund the amount to the applicants

decided by the demand survey. However, the officers were asked to consider framing of a new

scheme with lesser cost.

The CHB’s board of directors in its meeting in March had decided “The proposed general self-

financing housing scheme in Sector 53 needs to be made more lucrative. To reduce the land cost

component, the matter may be taken up with the administration to increase the floor area ratio

so that more flats can be constructed. Further, the possibility of some changes in the

specifications and design also need to be explored. Considering that framing a new scheme with

lesser cost and further possible changes may take considerable time, the board has decided to

refund the amount deposited by the applicants…”

There was a poor response to the demand survey, as only 178 applicants came up for 492 flats.

The CHB had reduced prices of flats twice and even extended the deadline for demand survey.

After witnessing poor response, the CHB, on January 14, further reduced prices by 5% to 7%,

and extended the date for submission of online application to February 24.

In July 2019, the CHB had proposed a 3BHK flat for Rs 1.85 crore, 2 BHK for Rs 1.6 crore,

1BHK for Rs 1.15 crore and accommodation for the economically-weaker section (EWS) for Rs

Newspaper/Online ET Realty ( online )

Date August 07, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/chandigarhs-

costliest-housing-scheme-faces-closure/77387228

58 lakh, drawing a lot of criticism.

The board released a new price list on October 10: 3BHK for Rs 1.63 crore, 2BHK for Rs 1.36

crore, 1BHK for Rs 90 lakh and a two-room flat for EWS Rs 50 lakh. Then on January 14, the

board decided that 3BHK will cost Rs 1.5 crore, 2BHK Rs 1.28 crore, 1 BHK Rs 86 lakh and a

tworoom flat for EWS would remain unchanged at Rs 50 lakh. The board official had said

persons applying under the demand survey would be given preference in allotment. The scheme

was proposed to be made open for all.

________________________________________________________________

Show-cause notices to 11 Jaipur civic body officials

“Strict action will be taken against officials who are not taking steps to collect revenue.

Sending notices is not enough but action should be taken against the defaulters and their

properties be seized,” said Dinesh Yadav.

Show-cause notices have been issued to 11 revenue officers of Municipal Corporation Jaipur,

Greater and Heritage for sending negligible notices to people defaulting urban development tax

or property taxes.

At a review meeting on Wednesday, both the commissioners Dinesh Yadav and Lok Bandhu

issued the showcause notices.

Municipal Corporation Jaipur, Greater’s commissioner Dinesh Yadav said, “Strict action will be

taken against officials who are not taking steps to collect revenue. Sending notices is not

enough but action should be taken against the defaulters and their properties be seized.”

It was decided that all the vegetable vendors who were recently identified and given identity

cards will again be tested for coronavirus. This will be done to avoid making them a super

spreader in the city.

According to the officials, it has been decided that every two months, random testing of

vegetable vendors will be done. Testing will begin from next week.

Both the commissioners instructed all officers that the complaints filed on PMO, CMO,

Sampark portal helpline should be disposed of within the next three days to reduce the

pendency. Tnn

________________________________________________________________

Newspaper/Online ET Realty ( online )

Date August 06, 2020

Link https://realty.economictimes.indiatimes.com/news/regulatory/show-cause-notices-

to-11-jaipur-civic-body-officials/77389014

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