Indian Construction and Real estate sectors are at huge Risk by Raghuram Rajan (RBI Governer)

Raghuram Rajan(RBI Governor)

The real estate and construction industries of INDIA are at huge tricking Time, Raghuram Rajan former Reserve Bank of Indian governor  has warned. Raghuram Rajan said the sectors are in huge Trouble, and the finance companies which lend to these sectors should have their asset quality reviewed.

 Raghu ram Rajan former Reserve Bank of Indian governor wrote in the India Today magazine that there is a significant distress in rural areas.

The former central banker said that there is a growth recession is going on, and the economy is  growing at a very slow pace and the unemployment is rising very fast. India’s GDP growth decreased to 4.5% in the September.

 A crisis among the lenders and a growing up of bad loans at banks have lending in the Idian economy. Raghuram Rajan suggested that the RBI should carry out a quality review of the non-bank finance companies.

The top fifty non-bank financiers are monitered by the central bank, which account for about 75% of total assets in the banking sector,  on Thursday Governor Shaktikanta Das said in a press conference.

We have a fairly good idea of where the vulnerabilities lie, said Governor Shaktikanta Das, reiterating that the central bank won’t allow any systematically important non-bank lender to collapse.

Owing to the slowdown and the financial crisis in the sector, residential projects worth around 66B USD are facing bankruptcy, said by a recent survey.

Nearly 4.54 lakh units running behind their completion dates due to various reasons according to property consultant JLL. In the scenario the residential real estate segment that presents the maximum amount of stressed assets.

The agency said India's residential sector has been reeling under the pressure of delayed projects with 4.54 lakh units running behind their completion dates.Some of them are already under bankruptcy.

JLL said that the value of these projects is estimated to be  around 66B USD as per the Bankruptcy Board of India,In September 2019 the total of 115 insolvency cases have been filed under the real estate category while 28 insolvency cases are closed and 87 cases are in under process, which are not Solved