Reports suggest that National Housing Bank (NHB) and finance ministry are devising a plan to prevent loans given by banks for projects which are stalled from turning worthless assets.
According to the plan, the ministry wants public sector banks (PSBs) to transfer such projects to ARCs against securitisation (against future cash flows of the projects) and let the Asset Reconstruction Companies ( ARCs) complete these projects.
Banks could invest in ARCs to support the completion and there could be a tripartite deal between the banks, ARCs and builders.
The plan was reportedly discussed at the meeting between PSB chiefs and the Finance Minister P Chidambaram in November. Among the points which came up were that restructuring norms for these housing projects be made similar to those for infrastructure.
According to the Indian Banks Association, the number of incomplete dwellings is about 100,000 in Delhi and 90,000 in Mumbai. Considerable delay in starting the projects, due to getting statutory clearances, had pushed project costs up almost 50 per cent.
The Confederation of Real Estate Developers Associations of India (Credai) has reportedly asked for better financing to complete all pending projects. NHB was working out steps in this regard, in consultation with Credai.
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