RBI reduces home loan exposure of co-op banks

The Reserve Bank of India said cooperative banks cannot give housing loans beyond 5 percent of their total assets.

Earlier, state cooperative banks and central cooperative banks were allowed to extend housing finance up to 10 percent of their total loans and advances. These banks, with exposure in excess of the new limits, have been asked to initiate steps to bring it down to the revised limits within six months.


Their assets may be reckoned, based on the audited balance sheet on March 31 of the preceding financial year, RBI said.

The decision would curtail their exposure to real estate. The revised limit would be applicable with immediate effect. They were earlier allowed to give house loan to an individual borrower up to  20 lakh. In case of a bank having a net worth of  100 crore and above, the limit was  30 lakh.


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