Unsold Flats With Builders Holistically :Indian Banks’ Association Formed Committee


The practice of housing project developers using real estate loans meant for one project to kick-start other projects came into sharp focus at a meeting of bankers convened by the Finance Ministry in Mumbai.

This tendency of builders to launch other projects when the earlier ones were not complete has caught the eye of bankers.

On the issue of there being no thaw in property prices despite slowdown in sales, bankers said those who invested in housing projects or / bank-rolled them at the pre-launch and launch stages were preventing builders from bringing down prices.

The meeting, which was presided over by Mr. D.K. Mittal, Secretary (Department of Financial Services), Ministry of Finance, comes in the backdrop of reports about the existence of large number of unsold flats with builders  / or developers in cities such as Mumbai.



The issue of unsold flats with developers / or builders was flagged at a review meeting of public sector banks last month (August 2012) in New Delhi.

At the Delhi meeting, Finance Minister  Mr. P. Chidambaram observed that when there is sufficient demand for dwellings in the cities, the presence of unsold flats amounted to blocking of capital.

Mr. Chidambaram said unsold flats should be a matter of concern for bankers who have funded the builders and developers, on the one hand, and property buyers, on the other.

The refusal of builders / or developers to reduce prices was cited as the main reason for flats remaining unsold.

If they bring down prices by 15-20 per cent, it should be possible to find ready buyers. The sale of such flats could provide a much-needed demand to push to the economy.

At the Finance Minister Mr. Chidambaram’s behest, the IBA (Indian Banks’ Association) has formed a committee under the leadership of  Mr. Ajai Kumar, Chairman & Managing Director, Corporation Bank, to look into the issue of unsold flats with builders / promoters holistically

The IBA committee will also examine ways to put pressure on builders / promoters to bring down prices & popularise home loan schemes through incentives.

SrC: BL
Share:

No comments:

Post a Comment

Popular Posts

Blog Archive

Recent Posts

Featured Post

BSE releases list of 25 stocks available for T+0 settlement starting March 28, 2024

BSE releases list of 25 stocks available for T+0 settlement starting March 28, 2024