RBI gives big boost to realty, says commercial loans won't be downgraded if delayed for genuine reasons

MUMBAI: In a big boost to project loans in the commercial real estate sector, the Reserve Bank of India on Thursday announced its decision to extend date of commencement for these loans by a year without downgrading asset classification.

This move would bring these loans in lines with the treatment rendered to other project loans in the non-infrastructure sector. The RBI is expected to issue details guidelines on this shortly.

“It has been decided to permit extension of date of commencement of commercial operations (DCCO) of project loans for commercial real estate, delayed for reasons beyond the control of promoters, by another one year without downgrading the asset classification, in line with treatment accorded to other project loans for non-infrastructure sector,” the RBI said.


It added that its measures would complement the initiatives taken by the government in the real estate sector.

In November last year, the government announced the setting up of a Rs 25,000 crore alternative investment fund (AIF), to provide relief to developers to complete unfinished projects. This is aimed to provide last-mile funding to developers and is being anchored by SBICAP ventures.