The Presidents/Chief Executives,

All Banks/DFIs,

Dear Sir/Madam,

Guidelines for Financing to Housing Builders/Developers

Shelter is one of the important human needs that has multiple effects on the society and economy of any country. Builders & Developers play an important role in increasing supply of housing units. Keeping in view the peculiar nature of the financing requirements of the builders/developers, the enclosed “Guidelines for Financing to Housing Builders/Developers” have been prepared in consultation with key stakeholders of the industry that include Commercial Banks/DFIs and Association of Builders and Developers to promote institutional financing for the construction projects of builders/developers in the country. These Guidelines, however, do not supersede the applicable/relevant regulations.

It is worth mentioning that providing an enabling regulatory framework and guidelines is only one important aspect and visible improvement in housing finance can only occur when the banks/DFIs reposition themselves strategically in the market by appropriately aligning their business strategies with the specific needs of the sector. It is expected that the banks/DFIs will make use of these Guidelines in designing housing finance products which meet varied needs of builders/developers, ultimately leading to better service and supply of housing units in the country. The banks/DFIs are expected to setup separate units and create requisite capacity to deal with builders’/developers’ financing.

Please acknowledge the receipt of circular.