Reserve Bank of India has revised the norms for urban cooperative banks for
giving loans to the housing and real estate (RE) segment. Working capital loans to
small contractors against hypothecation of construction material are exempted from
the existing norms that allow UCBs to use 15 per cent of the total deposits for giving
loans for housing and commercial real estate, RBI said. In a communication to chief
executive officers of UCBs, RBI has said it has fine-tuned the rule for aggregate limit for
housing finance. Now, urban banks can use up to 15 per cent of deposits to provide
housing, real estate and CRE loans. Earlier, the RBI norm permitted them to use up to
15 per cent of deposits for giving advances to housing loans and other block capital loans.
The 15 per centceiling was reckoned on total deposits at the end of March 31 of the
previous financial year.
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