Lending: Banks away from real estate companies

Indian real estate major's current outstanding debt crossing Rs 1,20,000 crore against Rs 88,000 crore last 2010-11 fiscal year. This is an increase of 36%.
Indian Banks have decided to go slow on lending to the realty sector.

It is a cause of concern for real estate companies with banks shying away from lending to the sector, especially in the wake of the new land acquisition bill. This has also led to a delay in the completion of housing projects in several parts of India. The alleged involvement of real estate companies such as Unitech and DB Realty in the 2G spectrum scam has also aggravated the problem.

The RBI (Reserve Bank of India) has also shown its discomfort with banks lendings to real estate companies.

The Banking requlator been revising regulatory guidelines relating to lending to the real estate sector from time-to-time to ensure that there is no fraud or default in the Indian realestate sector.
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