The recently announced credit policy of RBI has not made any changes to the interest rates and the home buyers, at least for the time being, could heave a sigh of relief.
But the decision to hike the amount that banks have to keep aside for advances to commercial realty sector from 0.4 per cent to one per cent with a view to build a cushion against likely non-performing assets (NPAs) in the sector could hamper funding to the sector.
However, the developers and other players welcomed the apex bank’s intention behind the move to prevent asset bubbles in the segment.
“I am fully for preventing asset bubbles but the increase in provisioning now sends a negative signal. The commercial real estate sector needs a push–the country needs IT and commercial space and the increase in provisioning could impede bank funding to the sector,” Sunil Mantri, Realty’s Chairman and Managing Director, said.
Mr. Niranjan Hiranandani, a developer, described the RBI action as “an ad hoc measure.” — PTI
News Published Under: The Hindu