 Mumbai's residential societies that have not been able to ink redevelopment deals with builders could now turn to banks for assistance. Banks are willing to finance entire redevelopment projects undertaken by residential societies.
The move would let societies use transfer redevelopment rights (TDR) or free space index (FSI) benefits for themselves.
Typically, redevelopment projects involve a new construction in which residents are offered the same, or a larger area, compared to what they owned earlier. The builder bears the costs of demolition, construction and rentals for relocation of the residents in the interim period, which may be two-three years. The builder, in turn, profits from the extra FSI or the TDR available.
So far, only Central Bank of India has plans to launch such a product. However, other co-operative banks that have a strong presence in suburban areas, where societies are likely to opt for redevelopment, are also exploring business opportunities in funding redevelopment for societies.
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