CREDAI seeks to reschedule debt repayment, reset loan interest rates
Publish on : 2020-03-19 12:53:34
Among other recommendations, the Confederation of Real Estate Developers' Associations of India has sought about Rs 1 lakh crore that is lying in the Building and Other Construction Workers' Welfare Cess Fund collected from developers be used to provide loss of wages and healthcare benefits to construction workers.
MUMBAI: In the backdrop of Coronavirus outbreak and its impact on the economy, realty developers’ body, the Confederation of Real Estate Developers' Associations of India (CREDAI), is seeking to put off the debt repayment scheduled over the next 3 months and be allowed to recovered in installments over the subsequent 12 months.
The developers’ body has also suggested that interest rate on all real estate project loans is re-fixed at the repo rate on which banks borrow from the Reserve Bank of India (RBI). It has assured the government that the relief will be passed on to the customers.
Among other recommendations, CREDAI has sought about Rs 1 lakh crore that is lying in the Building and Other Construction Workers' Welfare (BOCW) Cess Fund collected from developers be used to provide loss of wages and healthcare benefits to construction workers.
“As cash flows are affected because buyers cannot fulfill commitments due to the financial meltdown, additional funds from financial institutions are needed to meet increased costs on the same terms as existing loans and without additional collaterals,” CREDAI said in a statement.
It has also suggested that COVID-19 needs to be declared as ‘force majeure’ under Section 6 of RERA that provides extension of projects registration granted to promoters. CREDAI has sought that under RERA project completion time and exemption from penal charges to be extended by a year. Given the current scenario of no cash inflow for real estate, Special Mention Assets classification adopted by the central bank for delayed payments needs to be kept in abeyance or amended so that delays in repayments are not to be reported for the first 90 days, CREDAI said while adding that benefits under their insurance cover may be allowed by treating COVID 19 as force majeure.