In a move aimed at expediting the resolution and completion of stressed housing projects, the government has instructed banks to compile and share a list of stalled legacy projects eligible for support under the SWAMIH fund. This initiative comes as a response to concerns raised regarding procedural delays, which have been identified as a key obstacle hindering the effective utilization of the Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects (SWAMIH) fund, particularly in public sector bank (PSB) projects.
Stakeholders involved in the discussions emphasized the need to address these delays to enable the scaling up of the SWAMIH fund. Despite the fund’s successful completion of over 26,000 apartments and the return of over 25% of drawn capital to investors under SWAMIH-I, there are challenges related to its expansion due to the high number of stalled projects.
To further facilitate the resolution process, banks will also share their feasibility reports with the SWAMIH fund. This step is crucial for providing finance to complete stressed projects and ensuring faster resolution of the housing crisis.
In related developments, the Insolvency and Bankruptcy Board of India recently amended regulations to prevent the sale of housing units that have already been allotted and are in possession as part of the liquidation process. This move aims to safeguard the interests of homebuyers who have invested in these projects.
According to estimates by the Indian Banks’ Association, approximately 412,000 stressed dwelling units involving ₹4.08 lakh crore are impacted by stalled real estate projects. A significant portion of these units, around 240,000, is located in the national capital region, as highlighted in a report by a committee chaired by former NITI Aayog CEO Amitabh Kant.
In a separate development, banks have reached out to the Reserve Bank of India (RBI) seeking exemption for the SWAMIH fund from guidelines restricting investments in alternate investment funds (AIF) that indirectly invest in companies where the investing entity has lent or invested. This exemption is crucial for ensuring the continuity and operations of the fund, given its sponsorship by the government and the involvement of regulated entities as investors.
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