‘RBI move on SEZs could hit access to funds’
MUMBAI, SEPT 22: Developers and consultancy firms at the Ficci-organised real estate summit here differed with the apex bank’s view of treating special economic zones (SEZs) at par with any other real estate project.
In a recently-issued notification, the Reserve Bank of India (RBI) had said, “Keeping in view the current market conditions, it has been decided that the exposure of banks to entities for setting up SEZs or for acquisition of units in SEZs, which includes real estate, would be treated as exposure to commercial real estate sector with immediate effect.”
“The RBI is definitely controlling the flow of funds to the real estate sector with an endeavour to slow down the market. This is not a positive move,” Colliers International (India) Ltd chairman Akshaya Kumar said.
PriceWaterhouse Coopers executive director Vivek mehra said the RBI move would make funds difficult to raise and make them expensive as well. “It is unfair to treat real estate and SEZs in the same bracket. Development of an SEZ is actually development of infrastructure - social as well as industrial,” he said.
RSM Advisory Services also felt that the move stems from RBI’s over-sensitivity to the real estate sector. “The move would certainly create a lot of problems for real estate entities to source funds from banks. It is not desirable,” a company official said.
http://www.financialexpress.com/fe_full_story.php?content_id=141266
In a recently-issued notification, the Reserve Bank of India (RBI) had said, “Keeping in view the current market conditions, it has been decided that the exposure of banks to entities for setting up SEZs or for acquisition of units in SEZs, which includes real estate, would be treated as exposure to commercial real estate sector with immediate effect.”
“The RBI is definitely controlling the flow of funds to the real estate sector with an endeavour to slow down the market. This is not a positive move,” Colliers International (India) Ltd chairman Akshaya Kumar said.
PriceWaterhouse Coopers executive director Vivek mehra said the RBI move would make funds difficult to raise and make them expensive as well. “It is unfair to treat real estate and SEZs in the same bracket. Development of an SEZ is actually development of infrastructure - social as well as industrial,” he said.
RSM Advisory Services also felt that the move stems from RBI’s over-sensitivity to the real estate sector. “The move would certainly create a lot of problems for real estate entities to source funds from banks. It is not desirable,” a company official said.
http://www.financialexpress.com/fe_full_story.php?content_id=141266
posted by Sudarshan Rodriguez at 3:15 AM
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