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Banks can rejig realty loans based on project, not realtor

timesofindia.indiatimes.com

India Business News: The Reserve Bank of India (RBI) has permitted banks to restructure loans to real estate companies on the basis of the project rather than the develope

MUMBAI: The Reserve Bank of India ( RBI ) has permitted banks to restructure loans to real estate companies on the basis of the project rather than the developer. It has also indicated that banks can restructure loans drawn by a borrower during the current fiscal, provided the account was classified as ‘standard’ (not overdue for more than 30 days) as on March 1, 2020.These clarifications were issued by the central bank in a set of frequently asked questions (FAQs) on the resolution framework for Covid-related stress announced last month. On real estate, the RBI said, “Only in respect of borrowers belonging to real estate sector, and have both residential and commercial real estate business, the prescribed thresholds for the financial parameters may be applied at the project level.”The RBI also cleared the confusion on whether only that loan which was outstanding as on March 1, 2020 is available for resolution. It said the March 1 deadline is for determining eligibility, whereas the actual loan that may be considered for resolution will be the one that is outstanding as on the date of invocation of the resolution framework.This is a very significant development as many real estateā€¦

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