RBI increases limits on individual housing loans extended by cooperative banks

The Reserve Bank of India today 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 Rs 30 lakh to Rs 60 lakh and from Rs 70 lakh to Rs 1.40 crore in case of Tier-II cities.

For Rural Cooperative Banks (RCBs) with an assessed net worth of less than Rs 100 crore, the limit has been increased from Rs 20 lakh to Rs 50 lakh while for the remaining RCBs, the limit has been enhanced from Rs 30 lakh to Rs 75 lakh. 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.