Grappling with shortage of funds in the housing and realty sector, builders today demanded

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the Reserve Bank's intervention to prompt banks to reduce margins on their home loans besides ensuring adeqaute credit flow to the housing segment.

At a meeting with the Reserve Bank today here, builders are understood to have demanded 'more measures' from the central bank to provide relief to the cash-starved realty sector through proactive actions from banks.

"Banks are reluctant to extend loans to buyers and construction companies. Also the margins are higher. These concerns have been conveyed to the RBI in the meeting," Orbit Corporations' Chairman and Managing Director, Punit Agarwal told PTI here.

With the banks turning more risk aversive in the face of the rising badloans in the system, many lenders have increased margins on homeloans significantly affecting the ability of small home borrowers to secure credit, Agarwal said.

Leading realty player, Hiranandani Group's Chairman, Niranjan Hiranandani said the recently announced special housing package for loans upto Rs 20-lakh has contributed little to minimise the woes of builders as the scope of the scheme is limited in big cities like Mumbai.

"The package is definitely a welcome move. But there is need for more measures to stimulate demand in big cities like Mumbai, where the real estate prices are comparatively high," Hiranandani said.