Funds shortage and dip in property sales seems to have hit the country’s real estate firms hard. As this has affected cash flows the firms now feel that theirhttp://www.blogger.com/img/blank.gif ability to repay bank loans will be hampered. According to industry estimates at least six real estate companies are feeling the pinch and so they are finding it difficult to pay back bank loans as per commitment. This was revealed by two senior bankers and some real estate industry officials. After restructuring of loans by banks following the 2008-09 slump about Rs 20000 crore as bank loan repayments were due till 31st March from real estate companies. However, at least six companies could not meet this deadline.
According to the chairman of a large public sector bank who did not wish to be named said that these companies are on the verge to default. He further revealed that already some of these firms have overdue interest repayments. As of now there is no decision for immediate categorization of these loans as non-performing assets (NPAs). If interest on a loan is not paid for 90 days it becomes an NPA. Since no interest is earned by the banks on such loans therefore banks as per RBI guidelines are required to set aside money for NPAs. On the other hand a loan defaulter finds it difficult to secure fresh debt.
According to the chairman of a large public sector bank who did not wish to be named said that these companies are on the verge to default. He further revealed that already some of these firms have overdue interest repayments. As of now there is no decision for immediate categorization of these loans as non-performing assets (NPAs). If interest on a loan is not paid for 90 days it becomes an NPA. Since no interest is earned by the banks on such loans therefore banks as per RBI guidelines are required to set aside money for NPAs. On the other hand a loan defaulter finds it difficult to secure fresh debt.
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