The mortgage lender’s exposure to these projects is about Rs 1,100 crore, said managing director and chief executive officer Siddhartha Mohanty on Friday.
LIC Housing Finance has identified 14 projects which could be eligible for resolution under the government’s Rs 25,000-crore alternate investment fund (AIF) for reviving stalled residential projects. The mortgage lender’s exposure to these projects is about Rs 1,100 crore, said managing director and chief executive officer Siddhartha Mohanty on Friday.
“We have some 14 projects (eligible) for the alternate investment fund created last year. We have advised those developers to be in touch with SBI Caps (SBI Capital Markets) and the process has started,” Mohanty said on the sidelines of an event to launch LIC HF’s mobile app.
He noted that while these projects are eligible for resolution under the AIF scheme, the process will be time consuming because project completion is not an overnight job. “It takes time for a lender to appraise as well and it is construction-linked. These projects need last-mile funding,” Mohanty said. He added that the real estate sector has started to recover from a downturn and the asset quality in the segment should improve from here on.
The recent Reserve Bank of India relaxation for banks to allow commercial real estate projects an additional year beyond the date of commencement of commercial operations without a downgrade in the asset quality does not apply to non-bank lenders, Mohanty said. “Incidentally, that will help the sector as a whole if you allow one-year moratorium and stalled projects can be completed without downgrading the asset. Banks will have funds and they can lend more, helping the sector,” he observed.
Meanwhile, the housing finance company launched its mobile app and mascot Homy. The app has been developed in collaboration with Google Cloud. The app is aimed at minimising paper-based loan applications as also to improve the company’s interface with the consumer.