MHADA's 18% interest worries Maharashtra Deputy CM

01 Nov 2023

Devendra Fadnavis, the Deputy Chief Minister of Maharashtra, remarked that the current interest rates imposed by MHADA on developers were excessively high. He expressed the necessity to reduce them to align with the rates set by the BMC. Fadnavis announced that the state government would review the issue promptly and instruct MHADA to present a proposal. The goal was to decrease the current compounded interest rate of 18% to match the BMC's rate.

Fadnavis commented, "Charging 18% compound interest by MHADA is significantly elevated, and it is inappropriate to impose such a high interest rate. The interest rate should be on par with that of banks. I will intervene in this matter, and upon the representation from NAREDCO Maharashtra, the government will request MHADA to submit a proposal. This will bring it in line with the BMC, ensuring uniform regulations in both organisations."

Regarding the industry's request for a reduction in premiums, Fadnavis assured that the government was genuinely considering it. However, he added that it was challenging to determine when a decision would be made. He emphasised that the government had been deliberating on various demands from the real estate industry.

"After Maharashtra initiated MahaRERA, the entire real estate sector underwent a transformation, significantly boosting the confidence of small buyers. Developers adhering to MahaRERA rules established a fair market for buyers, fostering a level playing field. The sector is now witnessing the entry of ethical players from both corporate and non-corporate backgrounds," stated the deputy CM.

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