The ICICI Bank has launched a STACK for companies operating in the real estate sector. The STACK offers a one-stop shop for all banking requirements of real estate participants like builders, Real Estate Investment Trusts (REITs) and Alternate Investment Funds (AIFs).
In a statement, ICICI Bank said the ICICI STACK for real estate is a first-of-its-kind initiative that offers builders banking solutions such as the digital opening of bank accounts, instant generation of account numbers for RERA registration, construction finance, inventory funding, and lease rental discounting to cater to their financial needs, depending on the life cycle stage of a project. The STACK also enables them to manage their payment obligations to vendors, employees, utility providers and statutory payments efficiently.
For REITs and AIFs, STACK provides services for digital collection, reconciliation, surplus distribution and custodial services. REITs are trusts that manage high-quality real estate property portfolios, collect rent through lease income and distribute the surplus to the investors. AIFs invest privately pooled funds in various asset classes including the real estate sector.
“The real estate sector is the second largest employment generator in our country and is also one of the fastest growing sector in the economy. The sector’s contribution to GDP is likely to go up to 13% by 2025 from 7% now. The main participants in the real estate sector like builders, REITs and AIFs are poised to play a significant role in this expansion. Therefore, they require a banking partner which will serve their needs as well as provide solutions for their entire ecosystem,” Anup Bagchi, Executive Director, ICICI Bank said.
Digital bank account opening: The Bank offers builders the facility of opening accounts like designated RERA account, escrow account for project lending and a current account for regular expense management.
Loans: The Bank offers a wide array of loans to the builders throughout their project lifecycle, including construction finance, inventory funding and Lease Rental Discounting (LRD) facility. Additionally, the Bank provides builders with facilities like overdraft, letter of credit and bank guarantee to enhance financial and operational efficiencies.
Digital collection solutions: The Bank offers the builders a customised solution to digitally collect and easily process refunds for various projects in the pre-launch phase.
Payment solutions: The Bank offers tailor-made solutions to carry out bulk and statutory payments. With this, builders can conveniently pay salaries to employees, clear utility bills and payments to contractors/vendors. Further, builders can make statutory payments for TDS, GST, custom duty and Employees’ Provident Fund/ Employees’ State Insurance seamlessly through digital channels.
Customised mortgage loans for buyers: The STACK is a one-stop shop for mortgage loans to prospective home buyers. The Bank extends customised home loan solutions to retail buyers at the project premises. The Bank also provides Loan Against Property (LAP) and home overdraft facility.
Digital solutions for FDI and foreign exchange: The Bank also offers builders, REITs and AIFs a digital workflow that converts FDI remittance to Indian rupees and submits the required regulatory documents expeditiously through its CIB platform.
Services for REITs and AIFs: The Bank offers various services to REITs and AIFs. The Bank offers a digital collection solution to enable them to collect funds and rentals. It also facilitates reconciliation at a project/ tenant/ service level and investor level, respectively.