RBI permits co-op banks to give bigger home loans
14 Aug 2009
The Reserve Bank of India has permitted state and central cooperative banks to increase the amount of the housing loan they can provide to an individual borrower.
Cooperative banks having a net worth of Rs100 crore or more can now give a housing loan of up to Rs30 lakh, while banks with less net worth can now lend up to Rs20 lakh, according to an RBI release in Mumbai on Thursday.
So far, a state or central co-operative bank was allowed a maximum housing loan of Rs5 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 the release, 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 31 March 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.
The RBI also clarified 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 Rs1 lakh, the release says.
