The Indian real estate industry, until recently a booming business, is now struggling for financing from banks, a continued fallout from the Reserve Bank of Indias directive to clamp lending to the sector.
Most of the industry relies largely on bank borrowings, though large companies in this business also have access to internal accruals, private equity, venture funds and equity markets. Smaller realty developers typically count on banks for 70-80% of their financing.
But after RBI prohibited banks and housing finance firms from lending for land purchases last year, the regulator also made project commencement certificates from civic authorities mandatory for bank funding, making its tougher for developers to access capital from formal lenders.
More : livemint.com
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