RBI new ban likely to push up approval cost for property developers

The issue could be more worrisome for developers in Mumbai because premium payment and TDR appertain more to the city, experts said.

Property developers’ approval costs are likely to go up owing to the recent directive by the Reserve Bank of India (RBI) to banks that they should not lend to builders for premium payment and transferable development rights (TDR).

This will put pressure on them to raise their own funds. It could lead to an increase in prices of affordable housing projects, experts said.

The RBI is of the view that these payments are related to land buying and hence banks should not lend for those.

The issue could be more worrisome for developers in Mumbai because premium payment and TDR appertain more to