Disclaimer

Whilst every effort has been made to ensure the accuracy of the information contained in this publication, neither the netz capital nor any of its members

past present or future warrants its accuracy or will, regardless of its or their negligence, assume liability for any foreseeable or unforeseeable use made

thereof, which liability is hereby excluded. Consequently, such use is at the recipient’s own risk on the basis that any use by the recipient constitutes

agreement to the terms of this disclaimer. The recipient is obliged to inform any subsequent recipient of such terms.

Netz Capital Update: Sept 2011

Hotel Project Loans and Hotels

Construction Financing in India

In spite of RBI policy on tightening credit for the real estate and construction sector, Hotels is a

sector which is still looked at very positively by the Banks.

The Reserve Bank of India vide its circular to all Commercial Banks dated September 9, 2009 has

enclosed guidelines which has removed exposure by Hotels to be classified as Commercial Real

Estates. For a long time the Hotel Industry has been taking up this issue with the RBI and the

Ministry of Finance, Government of India asking for its removal as otherwise it has led to Hotels

being subject to extra provisioning norms as applicable to Real Estate. With this circular the

Hotel Industry would be able to avail of loans from Commercial Banks at lower rates of interest,

and therefore, Hotel projects which are very capital intensive could be constructed at reduced

project costs.

There is also a request to qualify Hotel and SEZ financing as Infrastructure lending which is a

very favorable long term sector in India.

Tourism Industry contributes as one of the largest employment generators in the country at

nearly 40 million jobs.

About Netz Capital Advisors LLP

Netz Capital Advisors is a Financial Advisory and training firm which enables small and medium

enterprises in making informed financial decisions for business expansion relating to the

guidelines of central bank (i.e. Reserve Bank of India RBI ) in India Netz Capital is assisting

several businesses with combined financial needs of over $500 million US Dollars.

Keywords : Hotel Financing, Hospitality Financing , Hotel Construction, India

Contact Information:

Mr.Anil Yadav President-Finance Netz Capital Advisors LLP

Email: anil at netzcapital dot com

Phone : +91 932484716 /91-22-28631151

http://www.netzcapital.com