The directive from the Reserve Bank of India to the banks on home loan is a blow for the realty companies. Previously, they were purchasing the vacant lands, in various areas and raising money, from the potential buyers and also from the real estate investors. They were trying different programs for attracting their customers. In the stock market, the realty shares have shed most of the interday trading losses, because; the investors shored up their shares. The Central Bank barred the banks for issuing loans for the under the construction projects and now; the developers are not able to use the old 20% - 80% housing loan schemes.
In this scheme, the initial payment of twenty percent was paid by the individuals, who were booking their homes. The balance amount was paid to the builders. The builders were paying the loan amount to the money lenders. Now, the scheme has been scraped by the RBI and it has affected the realty stocks.