Individual home loan cap for cooperative lenders doubled, Real Estate News, ET RealEstate

MUMBAI: The Reserve Bank on Wednesday doubled the maximum loan amount a co-operative bank can lend to an individual up to Rs 1.40 crore in view of soaring house prices. Guidelines governing maximum authorized loan limits for cooperative lenders were last revised over a decade ago.

RBI Governor Shaktikanta Das has announced that urban cooperative banks will now be allowed to lend up to Rs 1.40 crore from the previous cap of Rs 70 lakh, while rural cooperative banks can now lend up to Rs 1.40 crore. at Rs 75 lakh from the earlier cap of Rs 30 lakh. .

“In view of the increase in housing prices since the last limit review and taking into account customer needs, it has been decided to increase the existing limits on individual housing loans by cooperative banks,” Das said. .

Das, who made the announcement along with the other measures in the biweekly policy review, added that a detailed circular about it will be issued separately.

The governor said urban cooperative lenders are categorized into Tier I and Tier II, and the cap on the maximum loan amount will be governed by how a bank is recognized.

Rural cooperative banks include state cooperative banks and central district cooperative banks, and their net worth will determine the maximum lending limits allowed, he said.

Those with a net worth of up to Rs 100 crore will now be able to lend up to Rs 50 lakh per individual home loan from the previous cap of Rs 20 lakh, while others can lend up to Rs 75 lakh, Das said.

In what may delight developers, Das also announced that rural cooperative banks will now be allowed to lend to builders who have started residential projects, which they are currently prohibited from.

Das said the 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.

He said the overall housing finance limit for rural co-operative banks is unchanged at 5%, and lenders will have to extend commercial property loans – residential housing within the overall limit.

Meanwhile, the RBI has also moved to allow city co-operative banks to allow home banking to help the elderly and disabled segments, Das said.

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