According to him, developers had capital in the past and yet had the luxury of saying no to new investment in the last one year. That was time of excessive commitments and it would take time to correct that situation in the real estate sector. Srinivasan wondered over the abysmally small number of developers who could declare business size in excess of Rs 150 crore.

“Most developers have not built their balance sheets over the years, though they borrowed a huge amount of Rs 72,000 crore from banks… this calls for hard thinking. For, you have no choice but to prepare your balance sheet if you want to build your business in the long run and if you do not want to confine yourself to relationship banking,” he said.

Srinivasan said the Reserve Bank of India was often cursed for enforcing restrictions on banks’ lending parameters, but it should be remembered that this cautious approach was in the developers’ interest. He felt that banks must first be able to build confidence in the lending activity to build up stable banking operations.

He also advised developers to work closely with the planning authorities, especially when planning shopping complex after complex in a close range. “There is a disaster waiting to happen in terms of viability and lessons must be drawn from what happened in places like Gurgaon,” he said. HDFC general manager Irfan Kureishi also spoke on the occasion.