RBI raises limit of individual housing loans provided by cooperative banks

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The Reserve Bank of India has increased the existing limits on individual housing loans that can be extended by cooperative banks. In a statement, RBI informed that limits for Primary (Urban) Co-operative Banks – UCBs have been doubled for Tier I cities from 30 to 60 lakh and from 70 lakh to 1.40 crore rupees in case of Tier II cities.

For Rural Cooperative Banks with assessed net worth less than 100 crore rupees, the limit has been increased from 20 to 50 lakhs while for the remaining RCBs, the limit has been enhanced from 30 lakh to 75 lakh rupees. RBI said, the decision has been taken considering the increase in housing prices since the limits were last revised for UCBs in 2011 and for RCBs in 2009.

Further, considering the growing need for affordable housing, the apex bank has decided to allow State Co-operative Banks and District Central Co-operative Banks to extend finance to Commercial Real Estate – Residential Housing. While a detailed circular will be issued later, RBI said, this allowance will be within the existing aggregate housing finance limit of five per cent of their total assets.

The apex bank has also decided to permit UCBs to extend doorstep banking services to their customers on par with scheduled commercial banks.