Some Mortar For Bricks

Realty crashed against hard reality in March, but Cap’n RBI is at hand

- DHRUV AGARWALA

No one willingly enters choppy seas, at least not the average seafarer. The real estate industry is like that average person who likes calm waters but has been forced to navigate through rough weather for a few years owing to policy missteps, a slowing economy and broader inimical factors globally.

Help has been forthcoming in fits and starts, but it took a pandemic to get the right kind of attention. The Reserve Bank of India (RBI) has taken it upon itself to steer the real estate ship—its hull damaged beyond repair—towards calm waters. It relaxed rules on risk weightage for new housing loans by linking them to the Loan-To-Value (LTV) ratio alone. It waived the ticket size rule, which allows banks and financial institutions to extend bigger loans at a risk weight of 35 per cent, down from the previous 50 per cent. That should galvanize the sector, which has so far seen only measures to spur demand in the affordable housing segment.