ICICI Bank : launches STACK for companies in real estate sector

December 01, 2022

• This is a comprehensive set of banking solutions for real estate builders, REITs and AIFs

• First bank in the industry to offer real estate specific STACK to provide unparalleled convenience to players in this sector

Mumbai:ICICI Bank today announced the launch of a STACK for companies in real estate sector to offer solutions to their banking requirements on one platform. The STACK, which is a combination of digital and phygital solutions, enables participants of the real estate sector namely builders, Real Estate Investment Trusts (REITs) and Alternate Investment Funds (AIFs) to undertake banking transactions expeditiously. This initiative is an extension of the 'ICICI STACK for Corporates' which the Bank launched last year to provide a customised set of banking solutions for corporates and their entire ecosystem.

The first-of-its kind initiative offers builders, banking solutions such as digital opening of bank accounts, instant generation of account number for RERA registration*, construction finance, inventory funding, and lease rental discounting to cater to their financial needs, depending on the life cycle stage of a project. In addition, it enables them to manage their payment obligations to vendors, employees, utility providers and statutory payments efficiently.

The STACK also provides REITs and AIFs with services for digital collection, reconciliation, surplus distribution and custodial services. REITs are trusts that manage high quality real estate property portfolios, collect rent through lease income and distribute the surplus to the investors. AIFs invest privately pooled funds in various asset classes including the real estate sector. Both REITs and AIFs require robust collection, reconciliation and surplus distribution services digitally.

Speaking on the launch, Mr. Anup Bagchi, Executive Director, ICICI Bank said, "The real estate sector is the second largest employment generator in our country and is also one of the fastest growing sector in the economy. The sector's contribution to GDP is likely to go up to 13% by 2025 from 7% now. The main participants in the real estate sector like builders, REITs and AIFs are poised to play a significant role in this expansion. Therefore, they require a banking partner which will serve their needs as well as provide solutions for their entire ecosystem.

Our research shows that this segment requires availability of finance, solutions for digital collection and bulk payment options throughout their lifecycle - from construction to leasing and selling the property-- as well as services for their customers, employees and vendors. Armed with these insights, we are delighted to introduce a one-stop shop for the companies in the real estate sector. This will enable them to carry out their business more efficiently."

The key offerings of the STACK for companies in real estate sector:

• Digital bank account opening: The Bank offers builders the facility of opening accounts like designated RERA account, escrow account for project lending and a current account for regular expense management. These accounts are equipped with a convenient one-view access to all accounts with a single login on the Bank's Corporate Internet Banking (CIB) platform. The Bank has also introduced a completely paperless, digital on-boarding facilityfor builders to open the RERA account expeditiously and digitally. Further, the Bank facilitates builders to get instant account number for RERA registration*. In order to help builders to comply with RERA guidelines, the Bank transfers the specified portion of funds directly to the RERA accountof the project, eliminating operational friction for the builders. Additionally, the Bank offers the convenience ofdigital escrow account openingto enable builders to receive funds from various credit lines.

• Various types of loans: The Bank offers a wide array of loans to the builders throughout their project lifecycle. The list includes construction finance, inventory funding and Lease Rental Discounting (LRD) facility. Additionally, the Bank provides builders with facilities like overdraft, letter of credit and bank guarantee to enhance financial and operational efficiencies.

• Digital collection solutions: The Bank offers the builders a customised solution to digitally collect and easily process refunds for various projects in the pre-launch phase. The solution can capture the buyers' details, collect the booking amount digitally, give instant transaction status to the builder. Similarly, the builder can collect payments from the buyers in the post-launch phase of selling the property. A single platform helps builders to track collection from various buyers of multiple projects. It also offers customised MIS and automatic reconciliation of accounts. These solutions can be integrated with the builders' ERP via API integration or host-to-host SFTP (Secure File Transfer Protocol) solution.

• Payment solutions: The Bank offers tailor-made solutions to carry out bulk and statutory payments. With this, builders can conveniently pay salary to employees, clear utility bills and pay to contractor/vendor. Further, builders can make statutory payments for TDS, GST, custom duty and Employees' Provident Fund/ Employees' State Insurance seamlessly through digital channels. They can avail real time payment advice, schedule payments and do multiple GST payments in one go.

• Customised mortgage loans for buyers:The STACK is one-stop shop for mortgage loans to the prospective home buyers. The Bank extends customised home loan solutions to retail buyers at the project premises. The Bank also provides Loan Against Property (LAP) and home overdraft facility.

• Digital solutions for FDI and foreign exchange: The Bank also offers builders, REITs and AIFs a digital workflow that converts FDI remittance to Indian rupees and submit the required regulatory documents expeditiously through its CIB platform. This paperless process requires no visit to the branch. Additionally, the real estate stakeholders can avail various foreign exchange solutions through the digital platform, FxOnline, which offers hedging and settlement solutions for foreign exchange management. A team of specialists provides advisory services for regulatory requirements and structured transaction guidance on Foreign Exchange Management Act (FEMA).

• Services for REITs and AIFs:The Bank offers various services to REITs and AIFs. The Bank offers a digital collection solution to enable them to collect funds and rentals. It also facilitates reconciliation at a project/ tenant/ service level and investor level, respectively, bringing in significant operational efficiencies. They can avail this facility through an API integration, host-to-host SFTP or even receive such MIS on emails. The Bank also has an arrangement with various leading RTAs (Registrar and Transfer Agents) for providing digital solution to REITs and AIFs to distribute the surplus to the investors. Additionally, AIFs can also avail custodial services and fund accounting services.

To know more about and avail the products and services of the STACK for corporates in real estate sector, visit https://www.icicibank.com/html/en/corporate/icicibankstack/RealEstate.html

*Subject to terms

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About ICICI Bank:ICICI Bank Ltd (BSE: ICICIBANK, NSE: ICICIBANK and NYSE:IBN) is a leading private sector bank in India. The Bank's total assets stood at ₹ 14,88,674 crore at September 30, 2022.

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