mumbainew delhi finance minister pranab mukherjees direction to staterun lenders to prevent a recurrence of the loansforbribes scandal and banks decision to go for a critical appraisal of all real estate loans above rs 50 crore may stall projects and drive developers to private funds liquidity for the sector may dry up as bankers turn cautious in sanctioning fresh loans forcing builders to cut prices to improve cash position helping prospective buyers who have been holding on due to high pricesdb realty tumbled 10 indiabulls real estate lost 52 dlf fell 38 and unitech declined 6 as a fund shortage threatens to derail their project execution which had just started to show signs of recovery after the 2008 credit crisis the arrest of eight finance executives by the central bureau of investigation on wednesday on charges of taking bribes to sanction loans does not lead to a systemic risk since the amount involved is tiny bankers and bureaucrats said it is getting more attention than it deserves they saidbanks and financial institutions should strengthen the npa nonperforming assets monitoring and management in their institutions to ensure that advance action is taken to identify incipient sickness and take appropriate action on it said mukherjee a bank of india official said all bigtickets loans particularly to builders will come under the scanner now recall of loans can happen if there is a fear that the quality of loans may suffer but as of now there is no such worry and hence it would not prompt us to recall loans the arrest of finance sector executives for alleged corruption and passing on information regarding these transactions has shaken the banking sector bank of india central bank of india and lic housing finance whose executives were arrested have said they followed set norms and any violation may relate to individual cases involving specific executivesthere is no chance of anything becoming npa as a result of what has happened said ts vijayan chairman of lic the parent company of lic housing finance cbi has said incustody lic housing ceo ramachandran nair has confessed to the involvement of other board members according to times now news channel some of the telephone conversations of these arrested executives have also been tapped it said there will be repercussions in terms of increased caution by banks while lending to developers said anuj puri chairman country head jones lang lasalle india borrowing will become more expensive and the process involved in getting it will get lengthier as banks increase their vigilance levels while the panicky bankers would stay from decisionmaking for a while there is unlikely to be any recall of sanctioned loans that would be disruptivethere is no question of recalling loans since all the procedures of giving loans are followed said kr kamath cmd of punjab national bank one of the banks named by cbi there is no need for any kneejerk reaction however the loans that are sanctioned will be reviewedan unintended consequence of the scandal