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Bankers want govt. guarantee for funding housing projects
The Hindu  |  January 31, 2020

Alok Deshpande & Manojit Saha

Representatives of banks and financial institutions have sought a guarantee from the State to safeguard their investments in government housing projects.


On Monday, the Housing Department convened a meeting with the representatives to explore the possibility of funding government housing projects.


Chief Minister Uddhav Thackeray, Housing Minister Jitendra Awhad and Nationalist Congress Party (NCP) chief Sharad Pawar too attended the meeting, where the bankers expressed their reservation in participating in Slum Rehabilitation Authority (SRA) schemes. A special meeting on SRA projects has been planned on February 4 with SRA and Maharashtra Housing and Area Development Authority (MHADA) representatives to address their queries.


‘Clear guidelines’


According to banking sources, the major issue the bankers raised at the meeting related to the guarantee. “Low demand for housing could land us in trouble if the government guarantee is not extended. There have to be clear guidelines on how our investment would be protected,” said a banker who participated in the meeting.


While the bankers had no reservations about MHADA, several queries have been raised regarding the SRA schemes and investing in it, owing to delays, court cases and logistical problems.


Mr. Awhad, however, said the bankers have no problem in financing government housing schemes. “There are no reservations they are willing to fund MHADA projects as the State government will be directly involved as a support,” he said. The SRA issues, he said, would be resolved during the February 4 meeting.


Boost to industry


The meeting with bankers was in continuation with the government’s plan to invite financial institutions to fund the struggling real estate industry by promoting government projects. The meeting was attended by top representatives of State Bank of India, Bank of Baroda, Bank of India, Bank of Maharashtra, Central Bank of India and Union Bank of India.


In a review of the Housing Department two weeks ago, the CM had said a thriving real estate industry would help revive the economy.