RBI may work on ‘top-up’ loans for home buyers in stuck projects, ET RealEstate

July 12, 2023

The Reserve Bank of India (RBI) could look at providing a “special dispensation” to enable banks to extend additional finance to customers with restructured home loan accounts in a bid to help complete stuck housing projects, people aware of the development said.

In a June 19 meeting of a committee, set up under G20 sherpa Amitabh Kant to examine issues relating to “legacy stalled projects” in real estate, lenders sought the special regulatory dispensation to release extra funds through existing individual home loan accounts that are either restructured or revived, while maintaining the asset classification as ‘standard’, a person who attended the meeting told ET.

“The RBI representative present in the meeting has assured that the banking regulator will consider the special dispensation, and they are considering it. It’s likely to inform (the panel) about its decision soon,” he added.

Any such regulatory relief could also enable banks to disburse the remaining amount of sanctioned loans-which wasn’t released earlier after the construction of the flats got stuck-without asset quality dilution, he said.

Queries sent to the RBI remained unanswered till the time of going to press.

It was also revealed at the meeting that the National Capital Region and Mumbai alone were estimated to account for roughly two-thirds of the country’s total stuck housing projects. Moreover, about 60% of the stalled units had been purchased by home buyers with a capital commitment of close to Rs 2 lakh crore.


The meeting was also attended by Insolvency and Bankruptcy Board of India chairman Ravi Mittal, financial services secretary Vivek Joshi, senior officials of the ministries of finance and housing and urban affairs, RBI representative and chief executive officers (CEO) of Noida Authority, the Indian Banks’ Association (IBA) and SBICAP Ventures, among others.

Officials had earlier said the government was considering a multi-pronged approach-including through the Real Estate Regulatory Authority, and Swamih (Special Window for Affordable and Mid-Income Housing) Fund for last-mile financing, besides the IBC-to resolve stress in housing projects to ensure faster delivery of homes to buyers. This approach also includes an innovative IBC mechanism for housing.

  • Published On Jul 12, 2023 at 09:11 AM IST

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