After the State government, the Brihanmumbai Municipal Corporation (BMC) has offered sops to city builders.

The civic body has issued a circular reducing the rate of interest charged on instalments of fungible and premium FSI from 12% to 8.5%. The Hindu had recently reported several measures announced by the State government for the real estate industry. A meeting was held in June of the Chief Minister, top bureaucrats, representatives of builders’ associations. The associations suggested that the installment facility be reviewed. The BMC has now issued a circular reducing the rate of interest from 12% to 8.5% on the installments.

Where there is a default in the payment of the installment amount with interest on the due date, the interest on the differed payments is proposed to be reduced from 18% to 10% per annum for first six months and 12% for further six months. The circular has come into immediate effect and has been issued for two years.

R.A. Zope, chief engineer of BMC’s Development Plan, said, “The BMC is extending help to the real estate sector on a similar basis as the government. In an ideal situation, the developers should pass on this benefit to home buyers. A builder’s interest component burden is reduced, which means he can infuse more capital into the project which is why we expect projects to be completed faster too.”