The Reserve Bank of India on Wednesday doubled the limit for housing loans from co-operative banks and also allowed rural co-operative banks (RCBs) to finance residential real estate projects to support affordable housing and inclusive growth.
The central bank has authorized Urban Cooperative Banks (UCBs) to provide home banking services to meet the needs of customers, especially the elderly and people with disabilities. This would put UCBs on a par with regular commercial banks that already provide such services.
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RBI, in a monetary policy statement, today said it was increasing existing limits on individual housing loans by co-operative banks due to an increase in housing prices since the last review and after taking into account consider customer needs. These limits were last revised for UCBs in 2011 and for RCBs in 2009.
Limits for Tier I/Tier II UCBs are revised from Rs 0.30 crore to Rs 0.60 crore and Rs 0.70 crore to Rs 1.40 crore, respectively.
With regard to rural cooperative banks, the limits are revised from Rs 20 lakh to Rs 50 lakh for RCBs with an assessed net worth of less than Rs 100 crore and for other RCBs, the limits would increase from Rs 0.30 crore at Rs 0.75 crore. RBI will communicate the detailed standards separately.
It has been decided to allow RCBs – State Co-operative Banks and District Central Banks – to extend financing to commercial real estate – residential housing within the current aggregate housing finance limit of 5% of their total assets. This decision was taken in view of the growing need for affordable housing and to realize their potential by providing credit facilities to the housing sector, RBI added.