Reserve Bank of India (RBI) has decided to increased the existing limits on individual housing loans provided by cooperative banks, taking into account the rise in housing prices since the limits were last revised and considering customers’ needs for larger loans. RBI has also permitted the Rural Cooperative Banks (RCB) for financing residential real estate projects, in a bid to support affordable housing and inclusive growth.
About the limit:
Accordingly, the limits for tier 1/tier 2 urban cooperative banks (UCBs) stood revised from ₹30 lakh/ ₹70 lakh to ₹60 lakh/ ₹140 lakh. As regards rural cooperative banks (RCBs), the limits have been increased from ₹20 lakh to ₹50 lakh for RCBs with assessed net worth less than ₹100 crore; and from ₹30 lakh to ₹75 lakh for the rest. These limits were last revised for UCBs in 2011 and for RCBs in 2009.
- Considering the growing need for affordable housing and to realise their potential in providing credit facilities to the housing sector, the RBI has decided to allow state cooperative banks (StCBs) and district central cooperative banks (DCCBs) to extend finance to Commercial Real Estate – Residential Housing (CRE-RH) within the existing aggregate housing finance limit of 5% of their total assets. The RBI also permitted UCBs to offer door-step banking.