Cement traders to give credit to real estate and infrastructure developers only in lieu of security

Cement traders are looking at taking matters in their own hands. They want to put an end to cash-strapped developers failing to pay them on time.

Starting January 1, they will give credit to real estate and infrastructure developers only in lieu of security, which could be bank guarantees, letters of credit, or even asset-backed loans.

As the liquidity crunch deepens and these cash-strapped real estate developers are taking a long time to make those payments which are due, this is putting the cement companies in a fix because they don’t get credit as much as they provide.

What happens is the cement companies give them for cash and they have to wait for the payment to come up, which puts a lot of pressure on these traders. Now, the cement companies have eventually decided to set up certain norms and follow them rigidly.

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