How a bank credit shortage has hijacked Indian real estate's growth story

Some Rs 4.64 trillion ($63 billion) of residential projects are in limbo, according to Anarock

India’s banking liquidity crunch is extending to the nation’s developers, threatening to derail a nascent recovery in the property sector.

Home builders in India have increasingly been turning to non-bank lenders for funding as traditional financiers struggle under bad loans. But following the government’s seizure of troubled shadow bank Infrastructure Leasing & Financial Services Ltd. earlier this month, that avenue may be choked off too.

With non-banking financial companies themselves struggling, “their disbursal of loans to developers has slowed significantly,” said Anuj Puri, the chairman of Anarock Property Consultants Pvt. This has “hijacked Indian real estate’s growth story over the