Banks have decided not to grant loans to the builders not registered with the Real Estate (Regulation and Development) Act.
Already been much rush with the registrations under the Act, courtesy the 31 st July deadline.
RERA has not missed making its presence felt.
Ever since the Act has been implemented in the nation, it has not missed making its presence felt. Where it has proven to be a trouble for builders and the real estate industry, the buyers seek to make the most benefit out of it. The Real Estate (Regulation and Development) Act was applied on 1 st May 2017 onwards by the Center, followed by the notifications from the state cabinets, which is still underway.
In a most recent report regarding the RERA, Banks have decided not to grant loans to the builders not registered with the Real Estate (Regulation and Development) Act. This decision has been taken after concerning with the Reserve Bank of India.
There has already been much rush with the registrations under the Act, courtesy the 31 st July deadline, which was for the registrations of projects followed with the fines on delayed registrations, now this decision of boycotting the unregistered builders from getting loans is set to make an enormous impact on the real estate industry. This will make the builders more cautious and will enforce them to get on board with the centrals Act as soon as possible.
However, as the Act has not been notified by all the states, this may also affect many builders negatively due to the lack of official bodies to carry out the REREA registrations. It will restrict them from getting the required funds to continue projects until the time there the RERA Authority is made. This will be the second blow since RERA’s existence to the real estate industry as previously the builders were made unable to advertise their projects unless registered under the Act.
However, the banks and officials have shown such attitude only to make sure that the lending of loans is only to the trusted builders which will secure the refunding of the consumer’s investments in case of bad loans. No doubt the real estate industry is going through a tough phase, and such steps display the kind of prudent nature everyone has towards the builders and industry, but the contribution seems to be for a bright future.
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