RBI raises housing loan limit for urban co-op banks
31 October 2011
The Reserve Bank of India (RBI) today announced an upward revision in both the amount of housing loans that urban co-operative banks (UCBs) can grant as also the period of repayment of such loans.
Accordingly, Tier-I UCBs can now extend individual housing loans up to a maximum of Rs30 lakh per beneficiary of a dwelling unit while Tier II UCBs can extend individual housing loans up to a maximum of Rs70 lakh per beneficiary of a dwelling unit, subject to the prudential exposure limits prescribed by the central bank.
RBI has also enhanced the maximum repayment period of housing loans granted by UCBs (including the period of moratorium or repayment holiday) from the present 15 years to 20 years.
RBI had already dispensed with the stipulation that the amount of installment and interest should not exceed 30 per cent of the income of the borrowers. All other instructions regarding grant of housing loans by UCBs remain unchanged, RBI said in a notification.
RBI had, in May 2008, issued a circular revising the housing loan limits for urban cooperative banks and specifying the maximum permissible repayment period of housing loans granted by UCBs.
RBI, in its second quarter review of monetary policy in 2011-12, had announced plans to permit Tier-I UCBs to raise individual housing loan limit for urban co-operative banks.
The revision follows representations received from the urban co-operative banks and their associations, RBI said.