Criticises banks, NBFCs and HFCs for not passing on the benefit of repo rate cuts to customers
Devendra Fadnavis has promised to take up the demands of the real estate developer community with the Centre, including one-time loan restructuring and financial assistance. The sector is struggling to tide over the COVID-19 crisis and the subsequent dip in sales.
The leader of Opposition in Maharashtra legislative assembly and former chief minister was speaking at a webinar organized by Credai MCHI along with representatives of over 15 associations of developers operating in the Mumbai metropolitan region. He assured them that he would raise their concerns and demands to the government.
Fadnavis said that “logical, genuine and reasonable” demand (of the developer community) for a one-time debt restructuring will be taken up with the finance minister.
He said he has already indicated to union finance minister Nirmala Sitharaman beforehand that he would be accepting a petition from the MCHI developers. “She immediately gave me a go-ahead,” he said and expressed the confidence that “she will definitely look into the issue”.
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“I have already been discussing the real estate and other economic issues at various levels at the Centre and getting a positive response,” he said.
Later, Fadnavis tweeted: “Received online petition from CREDAI-MCHI, signed by almost 35,000 developers. The real estate industry requires many interventions from State & Central Government. I have assured them to take their petition to Hon FM @nsitharaman ji”
Finance Minister Nirmala Sitharaman replied to Fadnavis' tweet saying, "Thanks Devendra ji. Will receive the petition that you shall send. Assure you that we'll give it a fresh and open-minded look".
In another tweet Fadnavis said, “Along with other, main issues are restructuring of loans, pushing banks, HFCs & NBFCs to pass on benefits of repo rate cuts to the consumers, input tax credit to be given under GST. I assure all members that these & all issues will be taken up with the appropriate authorities.”
"Banks, NBFCs and HFCs have made large investments in the real estate sectors and if these assets are stressed then the money will come in trouble. So, I feel the demand for one-time restructuring of loans is logical and definitely I will talk to the government to request and indicate that they should consider this demand," Fadnavis said at the webinar.
The former chief minister expressed concern that banks, but for SBI, have not yet passed on the benefit of the repo rate cut to the end consumer. He agreed with CREDAI MCHI that the massive defaults arising out of high interest rate will ultimately lead to a rise in NPAs for the banks as well and “this will be disastrous for the economy as a whole”.
"The intention of the Centre and RBI is to revive the sector, However, if banks only think about their profits and margins of 23-25 per cent and do not pass on the benefit then it is wrong as it defeats the intention of the government and RBI," he said.
"All financial institutions should pass on the repo rate cut to all the consumers. This will help to improve the liquidity position. We will do the necessary follow up with the Centre," he said at the webinar.
The banks’ attitude does not live up to the good intentions of the Centre and RBI who are keen on increasing the liquidity, he said.
Fadnavis said Prime Minister Narendra Modi is very keen to support the businesses which is why the Rs 20-lakh crore relief package with predominant focus on the MSME sector was announced.
On extending the RERA time limit for completion of projects to March 2021, the senior BJP leader said there is a provision for this and he would take it up with the government.
On facilitating GST input credit for new projects, Fadnavis said the matter has been flagged to the GST Council and he expected a decision soon.
Fadnavis’ comments came at a time when Union Commerce Minister Piyush Goyal asked developers to sell their properties at realistic prices and not look to the government for more concessions.
