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One-time recast or one-time rollover of debt to prevent housing and real estate banking crisis seems to be what the prime minister’s office and the finance ministry are in favour of. It is up to the RBI to take the final call. What is this going to mean?
It means a lot. You have to understand that because of the multiple changes which took place in the policy level of the government in terms of demonetisation, GST and all these other things put together, there has been a huge pressure on the real estate sector and that is why we have a huge number of NPAs.
Some of them have not received permission, some of them have got environmental clearance cases late and some of them have various other permissions which are taking time as also a demand delay. Now if you put all the cases into NPA or put it under NCLT, then all the projects which are ongoing will not be finished in time and there is going to be a compounding or a cascading effect of NPAs in the real estate sector.
Both Naredco and Credai have been asking for a one-time rollover, similar to what happened in 2008 during the Lehman crisis. We expect that if this is done, then you will be able to prevent further NPAs taking place and this is at the option of the banks. It is not compulsory that the rollover has to take place. It is at the option of the banks and subject to RBI conditions.
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