RBI has warned urban cooperative banks against giving money to builders in a single large payment. The money should be paid in a staggered stage-wise manner, the apex bank has insisted.
However, the smart money says the RBI’s warning may cause liquidity crunch in the construction industry hurting the country’s economy.
On the contrary, some people are of the view that the RBI move will stabilise the market as due to higher credit costs caused by liquidity crunch housing will become much cheaper for the buyers.
A source keeping close tabs on the real estate developments is quoted saying the RBI’s directive has not come a moment too soon as this will have the twin outcomes of checking the builders’ loot and causing people to buy houses at reduced costs.