With the Supreme Court presiding over the resolution of the stalemate over the stuck housing projects of the Amrapali group, all stakeholders are supposed to cooperate in the mitigation of the woes of homebuyers. But it is intriguing that the banks still have a dilemma over providing a lifeline to Amrapali projects.

This is what the court receiver senior advocate R Venkataramani told during the recent hearing in the case before the bench of Justice UU Lalit and Justice Ashok Bhushan. According to him, given the lack of credibility surrounding the Amrapali projects, banks are hesitant in providing requisite finance for the construction of projects. On this, the bench observed that there is no room for scepticism over the viability of projects as the entire assets of Amrapali are in possession of the court receiver who is fully authorized to take all appropriate steps to ensure the completion of the projects. So, banks can very well decide the loan requests on merit.

It is yet to be seen whether banks pay heed to the advice of the supreme judicial body of India or take refuge in bureaucratic inertia, red-tapism, and procrastination that continue to be the bane of all sectors of the economy, including banking. It is very much evident by the way the RBI expressed its inability to intervene in the matter of ensuring funds for completion of the court-monitored Amrapali projects. The apex court had asked the RBI to file an affidavit whether it can intervene to ensure that banks put in funds to complete the construction of the Amrapali housing projects. It asked the advocate for the central bank to clarify the regulatory provisions. This observation from the court had come after the court-appointed receiver informed that he has not received any clear reply to his letter to the Governor of RBI and CMDs of other banks inviting them to finance Amrapali projects and for release of the loan amounts. On this, the bank regulator informed the court that it was for individual banks to take a call and it cannot compel banks to provide finance for Amrapali projects.

It is unfortunate that even as the Supreme Court is trying its best to ensure continuity in the construction of these projects, the RBI is not measuring up to its regulatory position to removes all constraints in banks extending project finance to Amrapali projects. As of now, funds are yet to be fully received from the SWAMIH Investment Fund though the apex court had in September this year directed the court-appointed receiver and SBI Caps to finalize the legal framework to issue funds to the tune of Rs 625 crore from the SWAMIH Investment Fund for six projects.

On the other hand, the poor homebuyers, who have been left in the lurch by the builder, banks, ministry of housing and urban affairs, auditors and development authorities in the entire Amrapali fiasco, have started depositing the amount due on them in the court’s registry to ensure completion of the construction work. So far they have deposited over Rs 260 crore as part of their dues in their last-ditch bid to ensure a roof over their heads.

(By Vishal Duggal & Rakesh Ranjan)