In a major move, the RBI has enhanced the Individual Housing Loans by Cooperative Banks, leading to widespread cheers among co-operators across states. These limits were last revised for UCBs in 2011 and for RCBs in 2009.
In a release, RBI says “Extant guidelines prescribe prudential limits on the amount of individual housing loans that can be extended by Primary (Urban) Co-operative Banks (UCBs), and Rural Cooperative Banks (RCBs – State Cooperative Banks and District Central Cooperative Banks) to their customers.”
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 release reads.
Accordingly, the limits for Tier I /Tier II UCBs shall stand revised from Rs 30 lakh/ Rs 70 lakh to Rs 60 lakh/ Rs140 lakh, respectively. As regards RCBs, the limits shall increase from Rs 20 lakh to Rs 50 lakh for RCBs with an assessed net worth less than Rs 100 crores; and from Rs 30 lakh to Rs 75 lakh for other RCBs. A detailed circular will be issued separately.
RBI has also permitted Rural Co-operative Banks (RCBs) to Lend to the Commercial Real Estate – Residential Housing (CRE-RH) Sector. As per the extant guidelines, State Co-operative Banks (StCBs) and District Central Co-operative Banks (DCCBs) are prohibited from extending loans to the commercial real estate sector.
Considering 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 finance to Commercial Real Estate – Residential Housing (CRE-RH) within the existing aggregate housing finance limit of 5 percent of their total assets. A detailed circular will be issued separately.
Thirdly, the RBI has also permitted Urban Cooperative Banks (UCBs) to Offer Door-step banking. In order to attain harmonization of the regulatory framework across REs and to provide the convenience of banking services to the customers at their doorstep, it has been decided to permit UCBs to extend doorstep banking services to their customers on par with scheduled commercial banks. A detailed circular will be issued separately, says RBI.
