RBI Liquidity package to help lessen COVID-19 shock to realty

The recent policy announcement by the RBI to inject liquidity in the system will help realty absorb COVID-19 shocks.

In a major relief, RBI has reduced the reverse repo rate by 25 bps. The apex bank has infused Rs 50000 cr in NBFCs through TLTRO 2.0. It has provided one additional year of loan restructuring for real estate projects. It has announced that the 90-day norm does not apply to moratorium granted to existing loans by banks. The LCA requirement of banks has been brought down from 100% to 80%. Also, a provision of Rs 10000 cr special refinancing facility is made including NHB.

Founder & Chairman, Signature Global, and Chairman, ASSOCHAM- National Council on Real Estate, Housing and Urban Development Pradeep Aggarwal says, ” The liquidity infusion will positively impact capital intensive housing and commercial realty. Realty companies were not able to take advantage of a steep rate cut as banks were not lending them. But now loans given by NBFCS will get the same benefits as scheduled commercial banks. The repo rate cut will help supplement this. Moreover, the one-year extension for restructuring real estate project loans will help developers manage their cash flows. All this will, in turn, put realty on the path of speedy recovery.

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