RBI has increased the upper limit of home loan amount by at least 100% for the individual borrowers of Primary (Urban) Cooperative Banks (UCBs) and Rural Cooperative Banks (RCBs – State Cooperative Banks and District Central Cooperative Banks).
The revision of these limits has happened after a gap of 11 years as these were last revised for UCBs in 2011 and for RCBs in 2009. According to the announcement made by RBI, for Tier-I UCBs the previous limit was Rs 30 lakh which has now been revised to Rs 60 lakh. Similarly, for Tier-II UCBs the limit has been increased from Rs 70 lakh to Rs 1.4 crore.
“This is a welcome move considering that limits were last revised almost a decade ago and with the increase in housing and real estate prices, increasing the limit was needed. This would give some uplift to the affordable housing segment,” says Aarti Khanna, Founder and CEO Askcred.com.
The increase in limits is even higher increase for RCBs. For rural co-operative banks, the limit has been increased from Rs 20 lakh to Rs 50 lakh for RCBs with assessed net worth less than Rs 100 crore; and from Rs 30 lakh to Rs 75 lakh for other RCBs. RBI will issue a detailed circular separately.
“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,” said the statement from RBI.