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17 - 08 - 2020
CREDAI Bengal Daily News Update | 17.08.20
Banks plan EMI deferment for home loan restructuring
Bankers are keen to restructure loans in order to avoid having to classify defaulters as
non-performing assets. Also, banks say this isn’t the right time to enforce security and
attach assets.
Lenders, including SBI, are working on restructuring options for home loans where the overall
tenure of the loan does not extend by more than two years, even after relaxing the repayment
schedule.
The options include allowing EMI deferment for a few months in cases where the borrower has
suffered total loss of income or allowing step-up EMIs, with a lower payout for a couple of
years to make up for a reduction in salary or loss of income due to the pandemic.
According to sources, the KV Kamath committee will not look into retail and home loan
restructuring and banks will draw up their own proposal which they will submit to their boards
by early next month after getting an idea of the number of borrowers facing stress.
Bankers are keen to restructure loans in order to avoid having to classify defaulters as non-
performing assets. Also, banks say this isn’t the right time to enforce security and attach assets.
Though RBI has let banks extend loan tenure by two years, bankers say that they cannot provide
a two-year moratorium.
Anyone with a 15-year loan who has availed moratorium for six months will already see their
overall loan tenure extend by 14 months. This means that at most banks can defer EMI by a few
months. The exact relaxation would depend on the interest rate that the borrower will be paying.
While home loan rates have come down to below 7%, banks say that it will be difficult to
provide their best rates to restructured loans as lenders have to make an additional provision of
10% on restructured loans. This will increase costs by up to 30 basis points.
According to the terms of reference of RBI’s appointment the Kamath committee is expected to
submit its report by mid-September. Bankers expect the committee to give various parameters
for restructuring including the maximum debt-equity ratio to be allowed, the permissible
leverage for each sector like hospitality, aviation, real estate, or construction.
The committee would also decide under what circumstances can conversion of debt to equity
would be allowed. In addition, every individual corporate loan, where bank exposure is over Rs
1,500 crore would be reviewed by the committee to consider restructuring.
________________________________________________________________
Newspaper/Online ET Realty ( online )
Date August 17, 2020
Link https://realty.economictimes.indiatimes.com/news/residential/banks-plan-emi-
deferment-for-home-loan-restructuring/77583615
While Mumbai, Bengaluru & Pune grow, NCR share in housing
sale dip to 9%: Report
In 2010, every investor wanted to buy houses in the National Capital Region hoping prices
would appreciate quickly and the market accounted for a third of all residential housing
sales in Indian cities. A decade later, a lot of developers have made money, but the
investors are realising that they didn't get adequate returns and the market is now sitting
on unsold inventory of 1.1 lakh houses.
NCR's real estate has lost its sheen— the region now contributes just 9% of sales to overall
cities' tally, selling a tenth of its peak numbers while other cities including Mumbai, Bengaluru
and Pune are now 2-3 times bigger, surging both in terms of sales as well as investor return,
according to a study by Knight Frank that analysed data of first half of 10 years of top 8 cities.
In 2010, every investor wanted to buy houses in the National Capital Region hoping prices
would appreciate quickly and the market accounted for a third of all residential housing sales in
Indian cities.
A decade later, a lot of developers have made money, but the investors are realising that they
didn't get adequate returns and the market is now sitting on unsold inventory of 1.1 lakh houses,
with the age of unsold inventory being 53 months—highest in the country.
The Covid-19 crisis might push the market further into disarray.
“Traditionally, NCR has been an investor driven market while other markets are end-user
driven. With prices not increasing, investors have moved away, crashing the housing market in
NCR,” said Mudassir Zaidi, executive director (north), Knight Frank.
Nearly all eight cities witnessed sales and launches fall steeply due to Covid-19 pandemic but
NCR was the worst affected market with sales and new launches capitulating 73% and 82%
YoY respectively during H1 2020.
Sales in traditionally end-user markets like Bengaluru and Hyderabad also fell sharply by 57%
and 43% YoY respectively during H1 2020.
The National Capital Region (NCR)’s residential market was already in a prolonged slump due
to several factors such as demonetisation, Goods and Services Tax (GST), Real Estate
(Regulation and Development) Act, 2016 (RERA), the ongoing liquidity crisis impacting the
developer community and a vast percentage of stalled residential projects in major peripheral
markets.
Newspaper/Online Economic Times ( online )
Date August 16, 2020
Link
https://economictimes.indiatimes.com/industry/services/property-/-
cstruction/while-mumbai-bengaluru-pune-grow-ncr-share-in-housing-sale-dip-to-
9-report/articleshow/77577219.cms
During 2019, NCR witnessed a slow recovery in residential sales volume as well as a steady
inflow of new launches as real estate developers reassessed demand in an end-user driven
market, unlike in 2010-11, when it was primarily investor driven.
However, with the Covid-19 pandemic outbreak in March 2020, the residential stage which was
set for recovery was again turned topsy-turvy.
“Real estate sector which was slowly coming up by March was hit with a complete halt in
construction and sales activities by March last week. We may witness resizing of units,
discounts, amenities and special payment schemes to be offered by developers to create
demand, especially during the upcoming festive season,” said Samir Jasuja, founder and
managing director at PropEquity.
Mumbai accounted for 30% of the total sale in 8 cities and maintained the average between 22-
25% throughout the decade and with 31.32 % share in H1 2020, it saw the highest share in a
decade.
“Mumbai and Delhi have always behaved very differently when compared purely on pricing.
The pandemic has definitely created a stressful market environment for developers as well as
the homebuyers who were actively looking at properties. Mumbai market is seeing demand
towards the affordable segment in areas such as Virar, Navi Mumbai and Thane whereas the
Delhi-NCR especially Noida is burdened with higher levels of unsold inventory and buyers in
this area prefer ready-to-move inventory,” said Farshid Cooper, MD, Spenta Corporation.
Bengaluru residential market has been growing steadily and now accounts for 20% share
against 7.6% in 2010. The COVID19 pandemic has pushed NCR behind Pune.
Among the micro markets in NCR, Gurugram accounted for a 27% share of total sales.
In H1 2020, Noida accounted for nearly one-third of NCR’s new supply with a 32% share of
total launches. The new supply declined abruptly by 90% YoY over H1 2019 due to an
oversupply of residential units, no new projects were launched in Greater Noida.
“Both Noida and Gurugram have seen significant fall in sales and new supply (new launches)
this year.The pandemic has simply aggravated the already existing problems of builders across
the two cities. The market was already reeling under a liquidity crunch in the light of the NBFC
crisis that began in mid 2018. With sales plummeting, it is likely that the sector will remain
impacted for,” Ankush Kaul, President (Sales and Marketing), Ambience Group. ____________________________________________________________________________________________
UP-RERA yet to recover over Rs 500 crore from defaulting
builders
Ansal Group, Supertech Group, Logix Group, Uppal Chadha and Jai Prakash Associates
are top 5 defaulting builders from the point-of-view of non-compliance of RERA in Uttar
Pradesh.
The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has so far issued about 2,000
recovery certificates of value worth over Rs 600 crore. About 15% of this has been realized and
transferred to the home buyers till date.
Concerned District Magistrates have been requesting RERA to help them in the recovery of the
dues by providing the details of the auctionable properties of these promoters.
UP-RERA has hence requested the development authorities across Uttar Pradesh under whose
jurisdiction the projects or the properties of the promoters are located to make available the list
of unsold inventories, the vacant land, and the unsold FAR in the projects, both ongoing and
completed of these defaulting promoters.
The information received from the authorities and the promoters will be passed on to concerned
collectors for the realization of the amount payable to the allottees through the auction of those
properties.
The top 10 defaulting builders from the point-of-view of non-compliance of RERA are:
S.
No.
Promoter Refund
Order
Possession
Order
Total RC
Issued
1 Ansal Group 875 465 1,340 372
2 Supertech Group 150 750 900 111
3 Logix Group 27 524 551 35
4 Uppal Chadha 40 267 307 18
5 Jai Prakash Associates 135 60 195 15
6 Paramount Group 2 207 209 1
7 Concept Horizon Infra 56 77 133 18
Newspaper/Online ET Realty ( online )
Date August 16, 2020
Link https://realty.economictimes.indiatimes.com/news/regulatory/up-rera-yet-to-
recover-over-rs-500-crore-from-defaulting-builders/77571862
S.
No.
Promoter Refund
Order
Possession
Order
Total RC
Issued
8 Sahara Prime City 36 36 72 31
9 Gardenia Aims
Developers
70 16 86 33
10 Krishna Infrahomes 57 0 57 33
(All amount in crore*)
UP-RERA has also issued directions to the 25 top defaulting promoters to make available
unsold inventory in all of their projects (both ongoing and completed), area of the vacant land
(unutilized land) in each of the projects, unused FAR in each of the projects, details of the re-
sale of the complainant's unit along with the date and value of the resale and the details of the
assets and properties of the company, including the land/plots owned by the company on which
a project is yet to be launched.
All these details are to be provided before August 17, 2020.
________________________________________________________________
Gurugram civic body mops up Rs 100 crore in property tax in July
alone
Till June, MCG had collected only Rs 21 crore from property tax, water and sewerage
taxes. Sources said while 2.3 lakh property owners had already paid their taxes, 1.7 lakh
were yet to do so.
The Municipal Corporation of Gurugram (MCG), which had been struggling hard to collect
revenues during the lockdown, has been able to mop up Rs 100 crore in the form of property tax
in July alone.
Newspaper/Online ET Realty ( online )
Date August 15, 2020
Link https://realty.economictimes.indiatimes.com/news/regulatory/gurugram-civic-
body-mops-up-rs-100-crore-in-property-tax-in-july-alone/77559673
This might bring some relief to the cash-strapped civic body, but officials expressed doubt if it
would be able to meet its property tax target of Rs 1,100 crore in the current financial year.
Till June, MCG had collected only Rs 21 crore from property tax, water and sewerage taxes.
Sources said while 2.3 lakh property owners had already paid their taxes, 1.7 lakh were yet to
do so.
The lockdown had caused a major dent in MCG’s revenue collection. Till July 4, the civic body
had not been able to generate even 1% of its total projected revenue for this fiscal. In its annual
budget, MCG has pegged the revenue generation for 2020-21 at Rs 3,800 crore, which includes
Rs 1,900 crore through stamp duty, Rs 1,100 crore from property tax and Rs 340 crore as
recovery from private colonies.
Officials are, however, hopeful of recovering the pending dues over the next few months.
Sources said while MCG had already collected about Rs 124 crore in property tax, it would mop
up another Rs 50 crore soon.
A senior MCG official agreed that property tax collection was extremely slow in the first
quarter, but picked up pace in the month of July. Of the total Rs 100 crore collected through
July, MCG secured Rs 50 crore in the last four days of the month, he said.
________________________________________________________________
Karnataka likely to introduce property tax slab for industries
At present, property tax slabs are residential and nonresidential (commonly called
‘commercial’), and the industries pay the commercial slab rates.
After land reforms and hinting at scrapping periodic renewal of licences, Karnataka is likely to
introduce a property tax slab for industries that will relieve them from overzealous local bodies
which levy high commercial rates.
At present, property tax slabs are residential and nonresidential (commonly called
‘commercial’), and the industries pay the commercial slab rates. The third category will be
between residential and non-residential ones, and details are being worked out.
“This is a long-pending issue and the concerns of the industries and investors are genuine.
We’ve decided to introduce a slab cheaper than commercial rates,” said industries minister
Jagadish Shettar.
‘Property tax problem has plagued us for long’
Over the years, the industry has made multiple representations about gram panchayats and
municipal bodies collecting the maximum amount on the commercial slab.
“The problem of property tax has been plaguing us for long. For instance, when the Peenya
estate came under BBMP (it was earlier under city municipal council), the tax went up from Rs
2,000 or so to over Rs 35,000 even as all other facilities remained the same,” J Crasta, national
executive committee member, Ficci, said.
Welcoming the move, CR Janardhan, president, Federation of Karnataka Chamber of
Commerce and Industries, said the government had, responding to industry appeals, issued a
circular late last year disallowing gram panchayats from demanding taxes as they please.
Gaurav Gupta, principal secretary (industries), said: “We are looking at a new slab for
industries across the state, covering all municipalities, towns and cities. We already have
separate slabs for electricity and water, and this will be the next step.”
He hoped the new slab will soon be a reality.
________________________________________________________________
Newspaper/Online ET Realty ( online )
Date August 15, 2020
Link https://realty.economictimes.indiatimes.com/news/regulatory/karnataka-likely-to-
introduce-property-tax-slab-for-industries/77559755
Chandigarh to push for freehold conversion before MHA
The administration had last converted leasehold plots into freehold in 1983 in the
commercial category. The matter was also taken by up by MP Kirron Kher with the MHA
and the ministry of urban development (MoUD).
The UT administration will take up the issue of converting leasehold properties into freehold at
Industrial Area, phases I and II, with the ministry of home affairs (MHA) next month, a
longpending demand of industrialists that will give them a sense of belonging and more space to
carry out their activities.
The administration has studied policies of neighbouring states of Punjab and Haryana and
Newspaper/Online ET Realty ( online )
Date August 15, 2020
Link https://realty.economictimes.indiatimes.com/news/regulatory/chandigarh-to-push-
for-freehold-conversion-before-mha/77563887
recently discussed the matter with ministry officials over phone, a senior official said, adding
the conversion rates would be notified after securing the approval of the ministry.
The matter was discussed in a meeting chaired by UT adviser Manon Parida with members of
Industrial Advisory Committee of Chandigarh before the lockdown. The administration had last
converted leasehold plots into freehold in 1983 in the commercial category. The matter was also
taken by up by MP Kirron Kher with the MHA and the ministry of urban development
(MoUD).
The administration had set up Phases I and II of Industrial Area during the 1970s on 147-acre
land. The plots are governed by zoning and architectural control prepared in accordance with
the conditions prevailing at the time. There are 1,884 plots in both phases, of which 700 are of 1
kanal and above, while there are 443 and 180 plots measuring 10 and 15 marla. There are as
many as 381 plots of five marlas.
Recently, the administration sought a report of violations in industrial plots, including leasehold
and freehold, in Industrial Area. The report was prepared by the UT estate office and placed
before the UT committee formed by the administration to address pending demands of
industrialists in the city.
The administration had allowed certain need-based changes in architectural controls in
accordance with modern day industrial requirements. The UT had even allowed use of the cycle
stand for other purposes such as storage of raw material and industryrelated functions. Besides
these, the UT stated that in the wake of theft incidents, partial covering of the central courtyard
with polycarbonate sheets for storage was allowed. This was subject to compliance of building
bylaws and fire no objection certificate from the competent authority in the municipal
corporation.
________________________________________________________________
Maharashtra must revoke confusing property registration circular
Experts said the circular issued on Friday is so poorly drafted that it will not resolve a
problem created by the revenue department in November last year and will continue to
cost the state government precious revenue.
The state revenue department has issued a circular to all registrars that they “may not insist” on
a no objection certificate from Maharashtra Real Estate Regulatory Authority (MahaRERA) to
register property documents.
Experts said the circular issued on Friday is so poorly drafted that it will not resolve a problem
created by the revenue department in November last year and will continue to cost the state
government precious revenue.
Nitin Kareer, additional chief secretary, revenue, said in November last a circular was issued by
the inspector general of registration that no property documents are to be registered unless the
project is registered with MahaRERA.
“Subsequently, MahaRERA issued a clarification that not all projects need to be registered with
the authority. Building projects, which are on plots less than 500 square metres with only eight
apartments, are exempted under MahaRERA and do not need to be registered with it. Hence, we
have now issued a fresh circular that registrars may not insist on a MahaRERA registration for
documents,” he said. In Mumbai, 90% of the plots are less than 500 sq m in size and so would
be exempt from MahaRERA registration, said experts.
Advocate Godfrey Pimenta said the circular that the revenue department has issued states all
those projects granted exemption by MahaRERA also get it under Rule 44 of the Maharashtra
Registration Rules, 1961.
“Rule 44 merely prescribes the requirements to be verified before accepting the document for
registration. It is improper on the part of the state government to exempt documents from being
registered, since the Registration Act, 1908, mandates that documents pertaining to property
whose value is above Rs 100 are to be compulsorily registered. The registration fee is currently
1% of the property value with a ceiling of Rs 30,000. The circular is very badly worded and
must be withdrawn.”
Satyan Prasad, techno-legal consultant to the real estate industry, said it is a registrar’s duty to
accept any document brought for registration. “The circular states the registrar may not insist on
Newspaper/Online ET Realty ( online )
Date August 16, 2020
Link https://realty.economictimes.indiatimes.com/news/industry/maharashtra-must-
revoke-confusing-property-registration-circular/77571468
an NOC but what if the registrar does insist on proof to show the project is exempted from
registration with MahaRERA. It only causes harassment to the developer and buyer,” he said.
Prasad further said the government can ask MahaRERA to issue an exemption certificate just
like it does a registration certificate. “This will help the developer who can put it up at his
project site to show the project is not dubious. It will help the buyer make an informed decision
and not be harassed by the registrar’s office and ensure the government earns revenue,” he said,
adding the Bombay high court has, in a judgement, stated Rule 44 can be invoked only if a sale
transaction is prohibited by law. “Both circulars must be withdrawn immediately.”
________________________________________________________________
