In a letter to the finance ministry, the developers' body says, the real estate sector is already under tremendous economic pressure and arbitrary and illegal practices lead to delays in projects and escalation of costs for the ultimate homebuyers.

"We, therefore, request you to have necessary guidelines issued to NBFCs that the interest rates on ongoing projects may not be revised upwards for as long as Reserve Bank of India (RBI) does not raise the benchmark rates. Secondly, the escrow amount being withheld by the lender must be well within the norms stipulated by Real Estate (Regulation and Development) Act (RERA) to ensure timely delivery to homebuyers. Thirdly, disbursements to ongoing real estate projects may not be stopped for next two years," CREDAI says.

The developers' body specifically accused Indiabulls of abusing its position and creating a situation where it was financially strangulating projects. It says, "Indiabulls being one of the largest lenders in the financial sector is causing undue hardship for developers by creating a situation of financial strangulation. On the one hand, in the past eight months Indiabulls has increased the interest rate by 4.5% to 6% for all developers. Since RBI has been lowering benchmark rates, it is clear that the interest rate has been increased by Indiabulls arbitrarily and illegally."

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