NEW DELHI: Major realty players and mortgage leader HDFC on Thursday expressed apprehensions that bank loans would become costlier in the wake of housing finance racket coming to light, but State Bank of India sought to allay any such fear.
Hinting at a price correction in the realty sector as a fallout of the scam, the HDFC chairman, Mr Deepak Parekh said every lender will become “cautious” while lending to companies in the real estate and infrastructure sectors.
“Some developers will bring prices down and sell…The unsold stock with developers is huge across the country. In this scenario, prices cannot go up definitely,” Mr Parekh added.
Global property consultant Jones Lang Lasalle said bank loans would be dearer and lenders would be extra cautious in offering loans to developers following the housing finance scam racket.
“There will be repercussions in terms of increased caution by banks while lending to developers. Borrowing will become more expensive and the process involved in getting it lengthier as banks increase their vigilance levels," JLL India chairman and country head, Mr Anuj Puri said.
State Bank of India chairman Mr O P Bhatt, however, sought to allay any such apprehension saying that the housing finance scam would not have any impact on loans to the realty sector.
“We are always cautious when we lend and you know there are always bad loans… Why should it impact (lending to real estate sector),” Mr Bhatt said.
“I won’t say that (the current system) is perfect. But there is no need for any alarm. I don’t think there is any systemic risk that we are talking about. These are individual cases,” he added.
The Yes Bank managing director and CEO Mr Rana Kapoor too said “it (housing finance racket) is just an aberration. It is exception to the rule so it is not going to have a serious impact”.
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