Numerous real Estate Project Stuck For Issues Other Than Liquidity Shortage: Deepak Parekh

Deepak Parekh, Chairman, HDFC shared his views on last mile funding issue and one-time restructuring for real estate companies.

Speaking about the last mile funding he told CNBC-TV18, “It is a very good beginning this Rs 25,000 crore. State Bank have already put the team together and we have deputed one of our person. They have approved four-five proposals and the group is working towards it. Hopefully, the balance that is the next Rs 12,500 crore will be set up by NIIF or some other agency. We have put Rs 250 crore in that fund with SBI.”

In terms of one-time restructuring for real estate sector, he added, “One time restructuring is absolutely necessary and it was done once before in 1993 or when the financial crisis was there. If that is not done then, every housing project or every loan by a bank or a housing finance company (HFC) will become a non-performing assets (NPA).”

According to him, delay in projects are not only due to finance issues.”Many of the delays are because you don’t get the environmental approval or there is a public interest litigation (PIL). I know of half a dozen projects where PILs are pending, so they cannot complete the building. It is not just shortage of money, it is various reasons like green Tribunal, tree authority etc- some approvals are not there. We need to have a look at one-time restructuring”

However, he said he had not heard anything yet from the Reserve Bank of India (RBI) or finance ministry on whether they were willing to consider this.