NOT APPROPRIATE

This has reference to the IBA advising the member banks
to consider extending assistance and concession to realty sector to tide over the crisis they are facing. The decision of the IBA is a move in the wrong direction and setting a very unhealthy precedent. Firstly, The situation is not as bad as it is made out be. Secondly the promoters, owners and others who are associated with the sector are neither poor nor at the mercy of the nature like our farmers. During the hey days they have amassed substantial wealth and with misplaced business sense and miscalculations of market trend especially of upward price movement they have invested in the related as well as unrelated projects by circulating credit raised from banks which has now resulted in their liquidity problems. Their have been quite some gullible buyers who have got into deals with is segment at higher prices and ultimately getting their lifetime savings and high cost loans with banks stuck without either creating asset of equivalent value or getting suitable returns from the property. This goes to prove the indulgence of the real estate segment in being a consenting party to the entire episode indirectly contributing the general state of economy. Further the present condition of economy is a temporary phenomena and part of any business cycle. When entire economy alongwith the individuals and business segments are reeling under the present circumstance the move from IBA if accepted by the banks will definitely lead to the interpretation of yielding to pressure tactics from the cartel as there is no reason to treat them at par with the farmers or the micro and small enterprises or even the large scale industries which are growth drivers of economy.