Venue—Hotel Kohinoor Continental
Moderator—Pranay Vakil, Chairman, Knight Frank India
Panelists—Kruti Jain, Director, Kumar Urban Developers
Sunil Dahiya, MD, Vigneshwara Developers
Atul Modak, Head, Kohinoor City
Ravi Sinha, CEO & Managing Editor, Track2Realty
Pranay Vakil: The problem is when having sanctioned the loan, there is no fear of revoking it. You can change your mind because these funds are kind of committed. When engage Shapoorji Pallonji or L&T to execute a project, you enter into a contract and you say that this is how we are going to make payments. Suddenly, if you are to switch off the tap, it is going to cause a lot of embarrassment to the developer.
Kruti Jain: The CCI talks about realty companies abusing market dominance. I don’t mean to take them head on, but they are talking about a document which is one-sided. Read a banker’s document to the developer. Where does the developer go because a banker will take, if I am not wrong, six signatures on a page? But the developer has nowhere to go for a recourse if the bank does not keep its commitment.
Now the government says we will not allow ECB in real estate sector. If ECBs are allowed, according to me, the bankers will have to lower down their interest rates and that might lead to deposit rates also falling down because they don’t have enough people to lend to. And because that whole vehicle set up by the Government is so simple that you can interpret the problem before it arises. Instead of finding a solution to this system that we have created, they have simply blocked it, like it is someone else’s problem.
Ravi Sinha: You mean if ECBs are allowed, there are enough lenders with money bags to push funds in real estate.
Kruti Jain: The ECB market is double the FDI market for other industries, except for real estate. The point is not to ask for allowing unlimited equity. The government has to keep the artificial price barrier, which even China is doing. We understand those economics and they are very complicated and definitely real estate is not going to be a part of it. There are, may be financial goons who will understand hedging and all that.
…..to be continued
