In what may serve as a proxy to the long-delayed realty regulator, the National Housing Bank on Wednesday said it will soon come up with a rating for housing projects in association with banks, to help buyers make informed decisions.
“We have sought Reserve Bank nod to launch the NHB-IBA rating for real estate projects. We expect to launching the rating soon. But we are not planning to make it mandatory for all,” NHB Chairman and Managing Director R V Verma said in Mumbai.
Using the rating ranging from 1-7 (seven being the best one) for a project, a potential buyer can make a more informed decision and go for the best project.
The rating will be given by one of the registered rating agencies and be made public. Aspects like financial details, legal issues like land titles, track-record of the builders, approvals received by the project and repayments made to financiers among others will be considered while arriving at the rating.
“We have suggested that let us not make the rating mandatory for projects. Rather, we can incentivise its use through various means,” he said.
The incentives will include concessional interest rates to borrowers opting for projects with better rating and also concessional interest rates to the builders for their project loans from the lenders, he said.
Mr. Verma said a committee of stakeholders, including representatives from the banking sector and rating agencies, which he headed, had recommended the introduction of such a rating system.
It can be noted that the government has been making attempts at coming up with a law to regulate the real estate sector, which will keep tabs and prevent any wrongful activities.
