10 - 06 - 2020

CREDAI Bengal Daily News Update | 10.06.20

RBI proposes easier securitisation, loan sale guidelines

Market participants have time till June 30 give their comments and suggestions to RBI on

these guidelines.

The Reserve Bank of India (RBI) is proposing a new set of guidelines that would address the

differential between mortgage loans and other loans securitisation, simplifying regulations. In

two draft papers released on its website the central bank also proposed to bridge the difference

between sale of loans and assignments’ of receivables which lenders use to improve their cash

flows while keeping the loans on their books.

In the draft guidelines RBI said has modified the definition of securitisation to include single

asset securities against the multiple asset securities allowed in the existing norms.

Only transactions that result in multiple tranches of securities being issued reflecting different

credit risks will be treated as securitisation transactions are covered in these guidelines.

Loans even purchased from other lenders can be securitised which is a change from the current

rules.

"Carve outs have been provided for Residential Mortgage Backed Securities (RMBS) in

prescriptions regarding minimum holding period (MHP), minimum retention requirement

(MRR) and reset of credit enhancements," RBI said.

Market participants have time till June 30 give their comments and suggestions to RBI on these

guidelines.

The central bank also allowed sale of standard loans either on a slump sale basis or through loan

assignments under which banks sell their loan receivables for upfront cash from the buyer to

improve their cash flows, while keeping the loans on their books.

Standard assets can also be sold through a loan participation contract either by funded or risk

participation. However stressed loans can only be sold through an assignment basis or through a

slump sale.

There will also be no requirement of MRR for sale of loans. Banks were so far required to retain

a part of the loan sold in their books which has been done away with.

Newspaper/Online The Economic Times ( online )

Date June 09, 2020

Link

https://m.economictimes.com/news/economy/policy/rbi-proposes-easier-

securitisation-loan-sale-

guidelines/amp_articleshow/76266393.cms#referrer=https%3A%2F%2Fwww.goog

le.com&amp_tf=From%20%251%24s

Lenders have also been given a free hand to decide their own price discovery process. Also,

stressed assets can now be sold to any entity that is permitted to take on loan exposures by its

statutory or regulatory framework. ___________________________________________________________________________

Devendra Fadnavis assures realtors to take up debt restructuring

plea with Finance Minister

Responding to the online campaign launched by the MMR Action Committee of CREDAI

MCHI, Fadnavis today said at a video conference with the developers that their “logical,

genuine and reasonable” demand for a one-time debt restructuring will be taken up with

the Finance Minister.

Devendra Fadnavis, former chief minister and leader of opposition in Maharashtra legislative

assembly, has assured realty developers of taking up various demands of the crisis-ridden real

estate sector with the central government in a bid to get them resolved.

Responding to the online campaign launched by the MMR Action Committee of CREDAI

MCHI, Fadnavis today said at a video conference with the developers that their “logical,

genuine and reasonable” demand for a one-time debt restructuring will be taken up with the

Finance Minister.

Later, Fadnavis tweeted: “Received online petition from CREDAI-MCHI, signed by almost

35,000 developers. The real estate industry requires many interventions from State & Central

Government. I have assured them to take their petition to Hon FM @nsitharaman ji”

In another tweet, he said: “Along with other, main issues are restructuring of loans, pushing

banks, HFCs & NBFCs to pass on benefits of repo rate cuts to the consumers, input tax credit to

be given under GST.I assure all members that these & all issues will be taken up with the

appropriate authorities.”

Over a thousand developers from across Mumbai Metropolitan region (MMR) took part in the

webinar. The MMR Action Committee presented to Fadnavis its online petition addressed to the

PM which has already gained about 35,000 signatures.

He expressed shock that banks, except for the State Bank of IndiaNSE 0.30 %, have not yet

passed on the benefit of the unprecedented repo rate cut to the end consumer.

Fadnavis agreed with CREDAI MCHI that the massive defaults arising out of high interest rate

will ultimately lead to a big jump in non-performing assets (NPAs) for the banks too.

____________________________________________________________________________________

Newspaper/Online The Economic Times ( online )

Date June 09, 2020

Link

https://economictimes.indiatimes.com/industry/services/property-/-

cstruction/devendra-fadnavis-assures-realtors-to-take-up-debt-restructuring-plea-

with-finance-minister/articleshow/76287613.cms

____________________________________________________________________________________

Newspaper/Online Financial Express

Date June 09, 2020

Maharashtra: Government panel suggests cut in stamp duty

The sub-committee for real estate was headed by HDFC chairman Deepak Parekh.

However, Parekh refused to comment on the matter.

A committee appointed by the state government for giving a fillip to real estate has

recommended reduction in stamp duty as well as premiums paid by builders to the BMC for

extra FSI.

The sub-committee for real estate was headed by HDFC chairman Deepak Parekh. However,

Parekh refused to comment on the matter.

A senior officer of the housing department said, “The committee has told us to reduce stamp

duty and also cut rates of the premiums the builders pay to the BMC. Over the last few years,

the premium rates emerged as a big source of income for the BMC. The builders get various

concessions in lieu of enhanced premiums. This has increased the cost of construction of new

buildings as well as the redevelopment projects.”

The housing department officer said that a call on the reduction in stamp duty and ready

reckoner rates will be taken by the revenue department while the urban department will decide

on the premium for FSI. Another senior bureaucrat said that three or four models of packages

have been formulated. The cabinet sub-committee will take a call, and later the final decision

will be taken by the state cabinet.

Builder Niranjan Hiranandani, national president of National Real Estate Development Council,

said, “If we want to follow Deepak Parekh Committee’s recommendations, we have to reduce

ready reckoner rates, else buyers and sellers will face trouble from the income tax department.”

Hiranandani had earlier told Mirror that flat prices cannot be reduced because under Section 43

CA of Income Tax Act, there is a penalty of 30 per cent each levied on the buyer and the

developer if they sell flats 10 per cent less than the prevalent ready reckoner rate.

Builder Sandeep Runwal said, “Cut in stamp duty alone won’t help. They have to give a waiver

in stamp duty for one year.”

Developers move online petition

Desperate for some incentives from the government to reignite demand cycle in the sector,

developer associations from the Mumbai Metropolitan Region on Tuesday came together to

form MMR Action Committee, and submitted a copy of their online petition on change.org to

former Chief Minister and Leader of Opposition Devendra Fadnavis.

Fadnavis assured them that he will once again take up their “logical, genuine, and reasonable”

Newspaper/Online ET Realty ( online )

Date June 09, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/maharashtra-

government-panel-suggests-cut-in-stamp-duty/76294922

demands for one-time restructuring of all loans with the Union Finance Minister Nirmala

Sitharaman. The petition has been signed by 35,000 developers.

________________________________________________________________

Uttar Pradesh provides interest relief to builders in Noida, Greater

Noida on land dues

The decision was conveyed to the Noida Authority, the Greater Noida Authority (GNIDA)

and the Yamuna Expressway Authority (YEIDA) in an official letter by Alok Kumar,

Principal Secretary, Industries and Infrastructure Development, UP.

The Uttar Pradesh government on Tuesday asked the three industrial development authorities in

Gautam Buddh Nagar to reduce interest rates on land dues in view of the COVID-19 pandemic.

The decision was conveyed to the Noida Authority, the Greater Noida Authority (GNIDA) and

the Yamuna Expressway Authority (YEIDA) in an official letter by Alok Kumar, Principal

Secretary, Industries and Infrastructure Development, UP.

Developers and real estate bodies like Naredco and Credai hailed the move, saying it will make

projects financially more viable and significantly benefit home buyers.

"There will be no interest for delay on land dues which were to be cleared between March 22

and June 30 if payment is made by June 30," according to the letter.

"Those who deposit their dues scheduled between March 22 and June 30, by September 30

would be charged a simple interest (SI). This SI would be counted from March 22 till the date

of payment," the letter stated.

On all the dues paid between July 1 and September 30, the concerned authority will charge

simple interest, it said.

"If these dues are not cleared by September 30, then default interest will be applicable on entire

period of delay," it added.

The letter also made it clear that date of payment for land dues scheduled in future will not be

changed, and they will be "as per lease deed".

"In the first round relief, the government has allowed Noida Authority, GNIDA and YEIDA to

charge interest on balance outstanding at MCLR (marginal cost of fund-based lending rate) +1

per cent. It is a big relief to developers which will help us to deliver projects fast to home

buyers," Naredco UP President and Supertech Chairman R K Arora said.

Realtor's body CREDAI's NCR unit president Pankaj Bajaj said for allotments to builders, the

authority rate of interest on instalment was practically coming to more than 15 per annum.

Newspaper/Online ET Realty ( online )

Date June 10, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/uttar-pradesh-provides-

interest-relief-to-builders-in-noida-greater-noida-on-land-dues/76294724

"Due to the slowdown in the market in the last four years, this rate of interest made most

projects in Noida and Greater Noida financially unviable. If projects become sick, not only is

homebuyer's investment at risk but even the Authority's paper receivables become doubtful," he

said.

He added that CREDAI had been requesting for making rate of interest reasonable and linking it

to MCLR.

"The revised rate is around 9 per cent per annum. This makes a material difference to the

economic viability of projects in this region. Ultimately it benefits the homebuyer by making

the projects more healthy and assuring delivery, Bajaj said.

Ashish Bhutani, CEO, Bhutani Infra, said the step has come in right course of time, the

moratoriums for delivery was a big relief and now with interest rates getting reduced this will

be another relief to thousand of property owners.

"The interest deferment will ease out the cash flow and developers would be able to focus on

delivery of projects," Bhutani said.

Manoj Gaur, MD, Gaurs Group and Chairman of Credai's Affordable Housing Committee said

the move will provide much needed help at this moment of crisis for industry as a whole.

"This will reduce the burden on the developers, the ultimate beneficiary will be home buyers.

The move will definitely give a relief to the affected developers," Gaur said.

Ashok Gupta, CMD, Ajnara India said the decision will ease out some burden.

"Developers are already busy going to the drawing board to make marketing strategies and

other operational nuances in post COVID-19 scenario. This decision of authority has come as a

relief," he added.

Vikas Bhasin, MD, SAYA Homes said that the lockdown waiver of interest rate on authority

dues will help the developers manage funds for activities that can expedite the sale process.

"We wish that other measures too will come the sector's way to ease out the burden," Bhasin

said.

Dhiraj Jain, Director, Mahagun Group said he hoped the state government would also come out

with other measures, including a relief package, for the sector.

"Real estate is an important part of the country's economy and anything for this sector will

ultimately help in quick economic recovery," he said.

________________________________________________________________

Ensure transparency in land survey project: Andhra Pradesh CM

“Carry it out in three phases on a priority basis. Digitalization and encryption of land

data should be part of the survey,” he told officials, during a reviewing meeting on land

survey project at his camp office.

Comprehensive land survey can resolve all land disputes, chief minister YS Jaganmohan

Reddy said on Monday, and directed officials to expedite the project work to bring in

transparency in all land deals in the state.

“Carry it out in three phases on a priority basis. Digitalization and encryption of land data

should be part of the survey,” he told officials, during a reviewing meeting on land survey

project at his camp office.

Ajeya Kallam, principal advisor to the CM, and revenue department principal secretary V Usha

Rani presented the progress report on the project at the meeting. They said the project would be

taken up right from the village secretariat level to cleanse all revenue records, while auto-

mutation of land registrations would end duplication of registrations which often lead to

unnecessary litigations.

As part of the project, mobile courts headed by the local sub-collector or revenue divisional

officer would be set up to address land disputes. “Entire data of the survey would be digitalised

and saved with different level of officials. It would be difficult to tamper the encrypted data as it

would be stored at different levels,” Usha Rani said.

The CM also reviewed the government’s Covid-19 measures in the evening. He asked officials

to immediately issue notification for recruitment of doctors and health staff in the hospitals to

handle the situation, which is likely to get worse in the coming days.

He also directed officials to take measures to ease traffic congestion at the inter-state borders.

“Screening and registration of those coming from other states should be completed fast. People

should not be made to wait for long hours. It is the time for multitasking. Increase staff and beds

in the hospitals, go for setting up of village and ward clinics, create awareness among people.

Everything should go simultaneously,” Jagan said.

He said easing of lockdown norms might lead to a spike in positive cases but there is no reason

to press the panic button. “People should be encouraged to get themselves tested for Covid-19

on their own,” he said.

Newspaper/Online ET Realty ( online )

Date June 10, 2020

Link https://realty.economictimes.indiatimes.com/news/infrastructure/ensure-

transparency-in-land-survey-project-andhra-pradesh-cm/76291719

The officials told the CM that 15,614 beds are available in 71 centres, while 4,659 positive

cases were registered in the state from the screening of 4,54,030 people.

________________________________________________________________

Pune civic body mulls proper housing for all slum dwellers

Municipal commissioner says learning has come from COVID-19 pandemic, with majority

of cases emerging from vastis; to combat any future outbreaks, PMC is considering

developing housing itself, preparing various options and calculating expected losses

In the unprecedented COVID-19 pandemic sweeping the nation, Pune has emerged as one of

the cities hosting an unfortunately large number of cases. And, of these, a major chunk has been

reported out of the slums of the city.

But having deployed significant resources and funding to handle the situation in these

areas, Pune Municipal Corporation (PMC) is now looking at a more long-term solution — the

total eradication of slums altogether, providing individual housing plus toilets to their residents,

with a new take on the existing Slum Rehabilitation Authority (SRA) scheme.

This, officials say, can be helpful to combat not just the ongoing pandemic, but also similar

outbreaks in the future.

At the moment, PMC has noted over 8,062 COVID-19 positive cases since March, of which 80-

85 per cent are from worst-hit slums of Bhavani Peth, Mangalwar Peth, Tadiwala Road, Parvati

Paytha, Janata Vasahat, Yerawada, Wadarwadi, Gokhale Nagar, Patil Estate, Ramtekdi, Bopodi,

Ambedkar Vasahat and more. There are a total of 564 slums under PMC, including 353 notified

and 211 un-notified ones.

Going forward, this is the root of issues that civic officials wish to focus on. They aim to put in

place independent homes for slum dwellers with toilets that do not have to be shared en masse,

irrespective of whether these houses are built by developers or the slum dwellers themselves via

housing societies.

PMC chief Shekhar Gaikwad, who is helming this initiative, is developing various options, as

each slum is unique and choices regarding the housing plan will need to be given to its

denizens.

“We have come up with options, keeping the public viewpoint in consideration. If we asked

them to come up with plans for houses, they would proactively demand roads, individual toilets,

parking and other facilities. A balance is important between what the administration can provide

and the aspirations of the residents according to area as well,” said Gaikwad.

The ambitious plans mooted include the local body itself developing slums, rather than taking

Newspaper/Online ET Realty ( online )

Date June 10, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/pune-civic-body-

mulls-proper-housing-for-all-slum-dwellers/76294981

on a developer for SRA. Lands owned by PMC could be handed over to slum dwellers’ housing

societies on lease or sale; another option is giving ownership of that specific property to slum

dwellers to facilitate the housing process.

Earlier, premiums were taken from slum residents for development, but PMC says it can now

develop slums itself one by one, including the construction involved. Moreover, houses will be

given to all slum dwellers, irrespective of whether they are authorised or unauthorised residents.

Said Gaikwad, “The entire concept will be ready in 8-10 days, after which I will put it before

the PMC general body and standing committee. We have expended much money and resources

to take on COVID-10 — after it is over, our citizens should not go back to the same filthy living

conditions using common public toilets. There should be an end to this problem — a permanent

one. We are also studying the expenses of this initiative and losses PMC will suffer from it.”

Attesting to the problem, PMC health chief Dr Ramchandra Hankare said that the

overwhelming majority of COVID-19 cases springing from slums make them particularly

difficult to tackle. “The closely packed nature of the houses leads to the infection spreading

much faster. We have had to develop quarantine facilities just to avoid this dissemination. For a

majority of people from these areas, home quarantine and isolation are also not possible — for

even those with mild symptoms — as many of the houses are too small to accommodate this.”

Welcoming PMC’s ambitious decision, public health expert Dr Subhash Salunkhe, who is

chairman of the Maharashtra Communicable Diseases Prevention and Control Technical

Committee, said, “If the local body develops such housing, it will lead to healthy living for tens

of thousands who are currently at the risk of airborne and waterborne epidemics due to filthy

surroundings, poor sanitation and hygiene. This has become a national phenomenon now — a

majority of cases of COVID-19 are being found in slums across India. Investment in health is a

positive step and providing such housing will lead to several benefits for citizens. It will

decrease morbidity and mortality due to diseases. Homes with proper ventilation, light and

sanitation would be of great help to fight this outbreak and any future ones.”

________________________________________________________________

Jaipur: Lottery for two housing schemes oversubscribed by 10

times

As these schemes are not being developed in far-flung areas, many buyers showed interest

to buy plots at these locations despite slowdown in the real estate market.

Having received 10 times more applications than the proposed number of plots, the Jaipur

Development Authority (JDA) on Tuesday drew the lottery for its two housing schemes.

As these schemes are not being developed in far-flung areas, many buyers showed interest to

buy plots at these locations despite slowdown in the real estate market. The JDA has proposed

to develop 359 plots both the schemes, Mohan Lal Sukhadia Residential Scheme and

Priyadarshini Nagar Yojana.

The reserve price for Mohan Lal Sukhadia Residential Scheme has been fixed at Rs 9,500 per

square metre and the reserved rate of Priyadarshini Nagar Scheme is Rs 12,500 per square

metre. Under the scheme, 10% employees of Central and state government departments and

state undertakings, six per cent for scheduled tribes, nine per cent for scheduled castes, five per

cent for disabled, two per cent for accredited journalists and 10 per cent for ex-servicemen

along with their families have been reserved. In an attempt to fill its coffers, the JDA had

planned to launch these schemes. ‘Priyadarshini’ scheme will be launched near Muhana village

in zone 11. The civic body will develop 187 plots. The smallest plot size in this scheme will be

45 square metre. Plot size of 90 square metre and 50 square metre will also be developed in this

scheme.

________________________________________________________________

Newspaper/Online ET Realty ( online )

Date June 10, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/jaipur-lottery-for-

two-housing-schemes-oversubscribed-by-10-times/76295077

Owners in Hyderabad struggling to find tenants

Complicating matters further is the return of the city’s sizeable migrant workforce to

their native places which have led many properties to put up their ‘to-let’ boards.

Homes in the city are having a tough time finding takers, according to property brokers. They

say that the flood of enquiries during what is usually their peak season — April to June — has

been reduced to a trickle due to the coronavirus pandemic.

Complicating matters further is the return of the city’s sizeable migrant workforce to their

native places which have led many properties to put up their ‘to-let’ boards.

“Our business is down to just 10% of what we otherwise register during this time,” said Rizwan

Khan a Begumpet-based broker. “Most hirings happen between April and June so people move

to the city either to join a new job or on transfer from their old job. That is the trend. Since

hirings have almost come to a halt due to the lockdown, it has affected us immensely,” he

added.

Brokers said that while they would usually attend to as many as 40 calls per day for homes

during this period, they are now receiving barely five to six calls. This has been the case for

brokers even when it comes to the city’s most sought-after locations such as Madhapur, Jubilee

Hills and Somajiguda.

“We are getting some local enquiries but that is limited. Most of our business usually comes

from the migrant workforce,” said Mohammed Ibrahim of Ideal Homes in Jubilee Hills. In fact,

many have even reduced their commission from one month’s rent to half-a-month’s rent, to lure

customers. However, takers have been few and far between.

A broker who had cracked the deal for staffers at a popular city restaurant said: “The employer

had rented out flats in two buildings in Kundanbagh to accommodate them. There were about a

100 people living in these houses. Now, they have vacated all but two flats as the workers have

returned home. The employer was paying over Rs 1 lakh a month in rent.”

But will this slowdown lead to cheaper rentals? “Not really. Though some property owners are

willing to offer discounts, many others are in the wait-and-watch mode. Maybe if things don’t

start looking up for another few months, they will consider a cut in rents,” said Khan.

________________________________________________________________

Newspaper/Online ET Realty ( online )

Date June 10, 2020

Link https://realty.economictimes.indiatimes.com/news/residential/owners-in-

hyderabad-struggling-to-find-tenants/76295030

Goa: TCP board takes up 67 zone change applications

A total of 82 applications were received by the department, of which, nine applications

were rejected and four were deferred, said TCP minister Chandrakant Kavalekar.

After a long hiatus, the Town and Country Planning Board met on Monday and took up 67

applications for zone change under section 12 of TCP Act for consideration. A total of 82

applications were received by the department, of which, nine applications were rejected and

four were deferred, said TCP minister Chandrakant Kavalekar.

Kavalekar told reporters that of the 67 applications taken up for consideration, 49 applications

are for plots which are smaller than 500sqm while 18 applications pertain to plots larger than

500sqm.

“We have not considered any land which falls in Coastal Regulation Zone (CRZ) or No-

Development Zone (NDZ) or private forests or if the land is partly zoned then we have asked

for inputs or reports from the concerned departments,” Kavalekar said.

At least 20 applications received by the department sought change in zone for plots that are

smaller than 300sqm.

The nine applications for change of zone were rejected as the land is categorised as forest area,

paddy fields, NDZ and private forests.

As per the provisions of Section 16B of the Town and Country Planning Act, the TCP board is

empowered to change zones in the regional plan. The TCP Act was amended in 2018 to add

Section 16B and it became a huge source of controversy for its potential for misuse and was

subsequently challenged in the high court.

The board also received two applications from individuals asking for roads shown in their

property to be deleted. “We gave preference for smaller plots. There are some areas which were

paddy fields, marked as private forests, partly orchard land or forest land which we have

rejected,” said the minister.

Kavalekar also said that a few appeal cases against decisions taken by the Planning and

Development Authorities were heard but no decision was taken.

“We got a few cases for appeals against decisions taken by the PDAs for which we had

Newspaper/Online ET Realty ( online )

Date June 10, 2020

Link https://realty.economictimes.indiatimes.com/news/industry/goa-tcp-board-takes-up-

67-zone-change-applications/76291772

hearings. There were three hearings. We have heard their appeals and in the coming 15 days we

have sought reports on the cases,” said the deputy chief minister.

________________________________________________________________