Fund Amrapali projects, our word is security: SC to banks | Delhi News – Times of India

NEW DELHI: Assuring banks and financial institutions that pumping in money into crisis-ridden Amrapali projects “would be secure”, the Supreme Court Monday said they should not insist on seeking mortgage or security as a pre-condition to release funds as the constructions are being done under its supervision.
As several banks told the bench of Justices U U Lalit and Ajay Rastogi that security of their investment was their main concern, the court said they should not be apprehensive as everything was being done by a court-appointed receiver and decisions were being made after its approval.
Senior advocate R Venkataramani, who as a court-appointed receiver is managing the affairs of the Amrapali Group and exploring all options to raise funds, told the bench that he and the NBCC had several rounds of meetings with several banks for project-funding but no progress could be made as the banks insisted on security. He added that it was difficult to provide security, and with that be case, it would not be possible to raise money needed to complete the constructions.
He pleaded the court that a direction was needed that “banks and other funding agencies, who are in deliberations with the receiver/ NBCC, shall not insist on any collateral security in addition to the assets of Amrapali which can be duly offered as sufficient security, proportionate to the quantum of funds that may be released”.
The counsels appearing for the banks told the bench that the financial institutions needed security as per the RBI’s guidelines. They also said that the banks could grant loan only up to 75% of the value of the security deposited.
The court, however, said that all decisions regarding Amrapali projects were being taken by a court-appointed receiver and the promoters and directors of the company had no role in them. “When there is sanctity of court behind every decision then what more security would you need. We are willing to pass order that you will not insist for security,” the bench said. The court then asked the receiver to hold fresh consultations with banks.
The receiver said SBI Capital, by next week, would release Rs 650 crore in tranches for six Amrapali housing projects.
SBI Capital, which is managing SWAMIH (Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects) Investment Fund created by the Centre, has agreed to provide money for Amrapali projects out of the fund. The bank, however, selected only six projects as it claimed that only those are viable and safe for investment.


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *