The ceiling for real estate loans doubles for individuals in cooperative banks

The Reserve Bank of India (RBI) has increased the upper limit of home loan amount by at least 100% for individual borrowers from Primary (Urban) Cooperative Banks (UCB) and Rural Cooperative Banks (RCB – State Cooperative Banks and District Central Cooperative Banks).

The revision of these limits has taken place after an interval of 11 years as they were last revised for UCBs in 2011 and for RCBs in 2009. According to RBI’s announcement today, for UCBs in Tier I cities, the previous limit was Rs 30 lakh. which has now been revised to Rs 60 lakh. Similarly, for Tier II cities, the limit has been raised from Rs 70 lakh to Rs 1.4 crore.

“This is a welcome move given that the limits were last revised almost a decade ago and with housing and property prices increasing, an increase in the limit was necessary. This would give some boost to the affordable housing segment,” said Aarti Khanna, Founder. and CEO Askcred.com.

The increase in limits is even higher for BCRs. For rural cooperative banks, the limit has been raised from Rs 20 lakh to Rs 50 lakh for RCBs with an assessed net worth of less than Rs 100 crore; and from Rs 30 lakh to Rs 75 lakh for other RCBs. RBI will issue a detailed circular separately.

“In view of the increase in house prices since the last revision of the limits and taking into account the needs of customers, it has been decided to increase the existing limits on individual housing loans by the cooperative banks,” the statement said. from RBI.

A rural cooperative authorized to extend commercial financing in the residential housing segment

To support the growth of residential housing in rural areas, the RBI opened a window for commercial property developers to access funding from the State Cooperative Banks (StCBs) and District Central Cooperative Banks (DCCBs), which were previously prohibited from granting loans. to the commercial real estate sector.

“In view of the growing need for affordable housing and to realize their potential in providing credit facilities to the housing sector, it has been decided to allow StCBs and DCCBs to extend financing to commercial property – residential housing ( CRE-RH) within the existing aggregate housing finance limit of 5% of their total assets,” the RBI statement said. The central bank will issue a detailed circular separately.

With the access of commercial developers to the new avenue, housing options in the residential segment will be stimulated in rural areas.

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