The Reserve Bank of India (RBI) on Thursday doubled the restrict on residence loans issued by city cooperative banks (UCB). With this, tier-I UCBs can concern particular person housing loans of as much as Rs 60 lakh whereas tier-II UCBs are allowed to supply loans of as much as Rs 1.4 crore, the central financial institution stated in a grasp round. The RBI had made the announcement in its June financial coverage. The revision in lending limits for UCBs was final finished in 2011.
“Taking into account the increase in housing prices since the limits were last revised and considering the customer needs, it has been decided to increase the existing limits on individual housing loans by cooperative banks,” the RBI had stated on June 8.
The central financial institution has additionally revised the prudential lending norms for these banks. According to the round, the RBI has diminished the publicity limits of UCBs to a gaggle of related debtors to 25% of its whole tier-I capital from 40% earlier. The publicity restrict for a single borrower for UCBs stays at 15% of the tier-I capital. The publicity of UCBs to housing, actual property and business actual property loans is proscribed to 10% of their whole belongings.
UCBs can not cost foreclosures expenses or pre-payment penalties on residence loans prolonged on a floating rate of interest foundation. Housing loans issued by UCBs must be repayable inside a most interval of 20 years, the round stated.
The central financial institution on June 8 additionally allowed rural cooperative banks to concern loans for residential housing tasks. The transfer is geared toward bettering credit score flows from cooperative banks to the housing sector.
Source: www.financialexpress.com”