To take care of the growing property rates:The RBI has modified the provisioning limit for housing loan to take care of the growing property rates mainly in the urban centers.
A move that would make it easier for banks to provide loans for purchase of residential properties.
"It has been decided to enhance the limit of Rs 20 lakh to Rs 30 lakh in respect of bank loans for housing in terms of applicability of risk weights for capital adequacy purposes. Accordingly, such loans will carry a risk weight of 50 per cent," Reddy had said.
The move would provide the bank additional capital for lending more to housing sector.
However, it may not result in immediate softening of interest rate for the housing sector, Oriental Bank of Commerce Executive Director Allen C A Pereira told media.
-The Economic Times
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