While the banks and financial institutions are overtly blaming the real estate companies for defaulting on the loan repayment, it is learnt that they are also showing largesse to the realtors by rescheduling their loan repayment. Bank sources tell Track2Realty that an estimated Rs.6,000 crore have been rescheduled in the past three months itself. With stress in the real estate volumes, companies are now negotiating with banks and financial institutions to push back their repayment deadlines.
Banks and financial institutional, on one hand, do not want mounting non-performing assets (NPAs) in their books. On the flip side, real-estate companies don’t have enough cash flows at this point in time to really keep up with their repayment schedules. So, companies have lapped up a new term loans to really repay their old loans.
Now, the net impact of this really gets nullified in their balance sheet. So, if you really take a look at the balance sheet, this will not really throw up any kind of evidence that such a thing has happened for the company. The mechanism, however, really enables companies to push back deadlines.
An estimated Rs.5000 to Rs.6000 crore have been redressed in the past three months. There are no real details available on particular companies or banks, but prominent lenders for real-estate are Punjab National Bank, State Bank of India, HDFC, Bank of Baroda and Oriental Bank of Commerce. Sources claim that companies could also include Puravankara, Everest, Parsvnath, Nirmal Lifestyle, Vatika, K Raheja Universal and Shapooji Pallonji. So, it’s pretty much a trend across markets and across companies.
