ICICI, other banks seek rent waivers
- Apr 17, 2020
- 2 min read
MUMBAI:ICICI Bankand other private lenders are understood to have reached out to their landlords seeking a waiver of rental for the period of the lockdown.
Sources said that ICICI Bank has asked operating offices to seek a waiver from their landlords as a measure of support to the bank, given the disruption caused by Covid-19. Other private lenders are also seeking waivers, sources said.
ICICI Bank has nearly 5,300 branches and over 15,000 ATMs across the country and a large number of them are on rented premises. Waiver of even a month’s rent would enable the bank to save several crores. According to the bank’s annual report, it spent nearly Rs 1,200 crore in rent, electricity and taxes.
The bank did not respond to a query from TOI.
“If the agreement has a force majeure clause which provides for waiver of rent during that period, then the tenant would have the right to invoke that clause and seek a waiver of the rent for that period,” said Rohit Shetty, a senior advocate specialising in real estate laws. If there is no such clause, the parties would have to abide by the terms of the agreement. “If the tenant wants to renegotiate, they can make a proposal, but it is up to the landlord to accept or not,” said Shetty.According to Kunal Moktan, co-founder and CEO of Property Share Capital, a lockdown cannot be constituted as a force majeure, particularly when banks have been functioning and using premises for their IT systems, which have remained operational.
“While ICICI Bank derstand retail establishments wanting to negotiate since revenues are directly linked to the store, it is unfair for offices not to pay. Ultimately, landlords also need to meet their obligations to employees, contractors and vendors,” he added. Property Share has a Rs 330-crore real estate portfolio, which is tenanted by mostly multinationals, all of who have met their obligations.
April 17, 2020
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