The Maharashtra government's amnesty scheme aimed at kick-starting stalled housing redevelopment and rehabilitation projects is likely to help financial institutions unlock funds worth Rs 35,000 crore, Maharashtra's Housing Minister Jitendra Awhad told the media.

This will also help thousands of slum dwellers and project beneficiaries, apart from presenting a relief to several leading financial institutions and funds that have given loans to slum rehabilitation projects in the nation's largest and most expensive property mark of Mumbai Metropolitan Region (MMR).

An important part of these loans is part of large institutions' portfolios, including DHFL, which has now been taken over by HDFC Capital, Piramal Group, Altico Capital, IIFL, and Yes Bank.

This amnesty scheme is likely to help thousands of slum dwellers as their projects will get finished and will also unlock financial institutions' funds worth over Rs 35,000 crore stuck in these projects, Awhad said.

Considering the slum dwellers' interest at large in such slum rehabilitation schemes and the financial institutions, entities that have recognition of the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and the National Housing Bank will be permitted to come forward for the fulfilment of projects to which they have provided financial aid.

The main problem that has led to concerns over the financing of these projects is that all the loans granted by these institutions to such slum rehabilitation projects are not identified by the Slum Rehabilitation Authority (SRA).

By participating in this amnesty scheme, financial institutions will be able to obtain the security for their loans as it will be recognised by the SRA. This will also support them to recover their dues as the projects will be revived, getting the much-needed liquidity.

The amnesty scheme declared for SRA projects will get relief for the lenders to these projects and help in the money-stuck recovery in many SRA projects. The amnesty scheme is likely to boost corporate participation and institutional finance availability because of the risk mitigation actions proposed, said Rajnish Kumar, former chairman of the State Bank of India (SBI).

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