RBI doubles ceiling on individual home loans for urban and rural cooperative banks

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The Reserve Bank of India has doubled the maximum amount of loan a co-operative bank can lend to an individual in view of soaring property prices.

Guidelines governing maximum authorized lending limits for cooperative banks were last revised more than a decade ago.

RBI Governor Shaktikanta Das in his monetary policy speech on Wednesday announced that city cooperative banks will now be allowed to lend up to Rs 1.40 crore against the previous ceiling of Rs 70 lakh. Rural cooperative banks can now lend up to Rs 75 lakh against a previous 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. .

A detailed circular on this subject will be published separately.

According to the governor, 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 district central cooperative banks. Their net worth will determine the maximum loan 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.

Rural cooperative banks will now be allowed to lend to builders who have started residential projects, the governor said.

The decision was taken in view of the growing need for affordable housing and realizing its potential by providing credit facilities to the housing sector.

The overall housing finance limit for rural cooperative banks is unchanged at 5%, and lenders will have to extend commercial real estate – residential housing loans 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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