LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

RBI tightens norms for home loan borrowers

 

The Reserve Bank of India made the norms for housing loans more stringent to curb the excessive borrowing that has pushed property prices in most metros. The Apex bank has set the ceiling limit on housing loans to 80 per cent of the property value which means a buyer will be entitled to borrow up to 80 per cent of the total cost of new deweling and the rest 20 per cent will be paid by the buyer.


Till now, banks used to impose their own ceiling on housing loans, but there was no cap from the RBI side.


Among other steps mandated by the RBI is an increase in the risk weight of high-value loans, an increase in the funds to be kept aside by banks as a cushion in case of defaults on loans made at teaser rates. The Repo Rate also being raised by 25 paise point to 6.25 per cent and Reversal Repo Rate hiked by 5.25 per cent.


RBI Governor D Subbarao told this to newspersons in Mumbai yesterday after the Reserve Bank conducted its mid-year policy review. RBI directed banks to keep more funds aside as a cushion for advances of 75 lakh rupees and above, sending realty stocks into a tailspin. Thus, banks will now have to keep more money aside for
giving housing loans. Bankers indicated that home loan rates may not go up immediately.

"Loved reading this piece by Laxman prasad?
Join LAWyersClubIndia's network for daily News Updates, Judgment Summaries, Articles, Forum Threads, Online Law Courses, and MUCH MORE!!"




Tags :

  Views  1086  Report



Comments
img