SC directs Noida, Greater Noida authorities to cap interest rates for developers at 8{b1ee4ac4d8d7b8e1af61a560a11ca52574b8103b547ccac8037ce0cdf9e7ba58}

In a relief for real estate developers, the Supreme Court has instructed Noida and Greater Noida Authority not to charge interest rates on the interest paid by builders. This interest rate cannot be more than 8 per cent.

A bench of the apex court issued instructions in this regard to the two civic bodies last week while hearing petitions concerning the Amrapali Group.

The SC also remarked that the situation of homebuyers in Noida and Greater Noida remains the same since there is no progress in the pace of unfinished housing projects. Relevant authorities have been told to convey to banks and other financial institutions that have agreed to provide financial assistance to clarify how much money they need at one time to complete the construction work.

Through a plea, Noida-based developer ACE Group had earlier requested the apex court to look into gratuitous interest rates on group housing land. A bench of the SC decided to club ACE Group’s plea with the Amrapali case.

At present, the Noida Authority has to recover close to Rs 25,000 crores in land dues from developers while the same for Greater Noida Authority is Rs 7,000 crores as per the old interest rates. However, these dues are likely to be reduced with the revised rate of interest.

The SC’s July 10 order directing Noida and Greater Noida authorities to reduce interest rates on land dues levied on developers from 20 per cent to 8.5 per cent (or even higher, on case to case basis) is set to benefit developers. However, homebuyers are also now demanding a slice of the pie.