RBI Allows Banks to Enhance Housing Loans

August 14, 2009	(Be the first to rate this story!)  Loading ...
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The Reserve Bank of India (RBI) has permitted the State and Central co-operative banks to provide enhanced housing loan to an individual borrower. They can now give an individual borrower housing loan up to Rs. 20 lakh. However, in the case of a bank having a net worth of Rs. 100 crore and above (as per the assessment made in Nabard’s latest inspection report), the housing loan limit per borrower will be Rs. 30 lakh. Hitherto, a State/Central co-operative bank was allowed a maximum housing loan of Rs. 5 lakh per borrower, subject to the condition that the aggregate housing loans outstanding on any day against individuals, institutions and societies should not exceed five per cent of its total deposits.

According to a release from the RBI, the aggregate of housing loans outstanding on any day against individuals, institutions and societies should not exceed 10 per cent of the total loans and advances of the bank as on March 31 of the preceding year. However, this limit can be exceeded to the extent of funds obtained for the purpose from the higher financing agency and refinance from the National Housing Bank, says the release. The RBI also clarifies that housing loans would not include finance to commercial real estate sector. The apex bank had already advised State and Central co-operative banks through a circular in May this year to desist from financing the commercial real estate sector. For repairs, additions and alterations to the existing houses, the maximum amount of loan per individual borrower stands revised to Rs. 1 lakh, the release says.

News Published Under:   Real Estate India, Banking and Finance |

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