Recovery of assets under SARFAESI Act: Estimation of risks to banks

Abstract

The real estate sector accounts for almost one-fifth of India’s GDP and is the second largest employment driver. It is undergoing tremendous changes and is currently in a phase of consolidation. The regulatory environment is constantly evolving, with bills such as the Real Estate (Regulations & Development) Bill, 2011 that proposes to take measures for the growth and promotion of a healthy, transparent, efficient and competitive real estate sector. Out of the various fields under the real estate sector, the residential real estate industry has seen high growth due to population growth, increased job opportunities and income levels and easy availability of finance. According to the Ministry of Finance's Economic Survey (2011-12), the housing sector ranks third in its breadth of impact and fourth in its multiplier effect on the economy. Housing loans as a percentage on India’s GDP are currently at about 7%1