With barely anyone buying property in these lean times, banks fear that these builders and real estate firms might default on their payments. Thus pressure is being brought to bear upon these firms by lenders who are suggesting to builders to drop prices and woo the buyers back into the market.
A recent report in the Economic Times said that the lenders are telling builders to ‘sell-before-it's-too-late'. The report said that banks and institutions have lent over Rs 75,000 crore (Rs 750 billion) to Indian builders, not including the Rs 25,000 crore (Rs 250 billion) worth of bonds and debt papers which mutual funds had bought.
Image: Worker on a construction site as the sun sets in New Delhi. | Photograph: Manan Vatsyayana/AFP/Getty Images
Also read: Seven days that shook the financial world
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