Realtors’ body the Confederation of Real Estate Developers’ Associations of India (CREDAI) has sought Prime Minister Narendra Modi and the Reserve Bank of India’s intervention in the matter of banks and financial institutions not providing finance to projects not registered with respective state Real Estate RegulatoryAuthorities.
On August 8, ET had reported that banks have decided not to extend loans to those projects that have not been registered under RERA and the compliance will be must for availing bank finance.
Lack of appropriate infrastructure and notification of RERA rules has led to majority of developers not being able to register their projects on time leading to delays and a loss of revenue for the state and central government, CREDAI said in a release.
CREDAI has pointed out that a large number of states have yet not appointed a regulator, while some appointed the same only recently. The developers’ body claimed that this did not allow builders enough time in registering their projects with the authority leading to their increasing difficulty in adhering to delivery timelines. This has a direct impact on the consumers since they continue losing money, in the form of EMIs on the home loan and paying for a rented accommodation, the release said.
While highlighting that banks and financial institutions have stopped funding unregistered projects, CREDAI added that this has led to shortage of funds. “However, there is no legal support in place for this stance taken by them. This move further hampers the developers in completing their projects which means delayed possession to customers who have taken loans, pushing them into financial distress,” the release added.
The realty developers’ body is seeking more clarity on various aspects of RERA such as the definition of an ‘ongoing project’ and has requested for expedition of processes from the state and central authorities.