Finance Minister P.
Chidambaram has asked the banks to pressurize real eastate developers
to bring down the price of the houses to give an impetus to the
sluggish economic growth. In his meeting with the heads of public
sector banks, Mr. Chidambaram said that the builders have large
inventories of unsold residences, for which they do not have buyers
at current level. Also they are not lowering the prices to raise
demand.
He also told the banks
that the situation has led to huge lock up of capital. He further
added that builders have borrowed from the banks and the bank has
also financed home loans for retail segment. At the end of the last
fiscal, the banks had lent Rs. 2.5 lakh crore to retail customers
while Rs. 1.2 lakh crore was disbursed to accounts of builders.
A senior banker also
stated that the builders should review the market condition and make
correction in prices rather than just expecting banks to reduce the
interest rates on home loans. While representative of builders
demanded a reform in regulations to allow them to reduce prices.
The union government is
under a lot of pressure due to rising inflation, and sluggish growth
rate, and this is one of the attempts to make residence more
affordable and give a boost to the economy.
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