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Chidambaram wants banks to fund residential projects to perk up economy

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Chidambaram wants banks to fund residential projects to perk up economy

Last updated: November 22 2012
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  • Chidambaram wants banks to fund residential projects to perk up economy

    Addressing a meeting in New Delhi with the chiefs of state-run commercial banks, Finance Minister P Chidambaram has asked them to help builders, especially those involved in construction of residential projects, to arrange fund for the successful and timely execution. This need has come up in the wake of the faltering economic growth.
    In the meeting, Chidambaram has discussed various problems of the real estate sector with the heads of the banks.

    "The minister asked banks to fund those residential projects that are stuck for want of funds. This, according to him, will help kickstart the economy," said a bank chief who attended the meeting.

    In August this year, shortly after returning to the ministry, the finance minister had asked banks to put pressure on builders to lower prices in order to reduce a growing inventory of unsold apartments.

    Chidambaram reviewed a report prepared by Ajai Kumar, CMD of Corporation Bank, on unsold stock in the real estate market and the way ahead. The report highlighted the need for builders to arrange their own resources for equity.

    The report also stressed the need for builders to open an escrow account with banks. So far, many builders show advances collected from purchasers of property as their equity contribution.
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