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Realty shares fall on RBI housing loan directive

A general overview shows construction site of a DLF commercial complex in Mumbai July 3, 2012. REUTERS/Danish Siddiqui

Reuters Market Eye - Shares in real estate companies fell after the Reserve Bank of India (RBI) said late on Tuesday that housing loans from banks to individuals should be closely linked to the stages of construction.

Upfront disbursal of lump sum loans should not be made in case of incomplete or housing projects under construction, the central bank said.

DLF Ltd (NSI:DLF.NS - News) slumps 3.9 percent, Indiabulls Real Estate Ltd (NSI:IBREALEST.NS - News) falls 3.8 percent, while Housing Development & Infrastructure Ltd (NSI:HDIL.NS - News) is down 3.2 percent.

Analysts say this may lead to further liquidity issues, lower sales for developers, which can force them to cut prices.

(Reporting by Abhishek Vishnoi)