The Reserve Bank of India vide its notification dated 8th June 2022, has revised the limits on residential housing loans sanctioned by rural co-operative banks to an individual borrower. Extant guidelines prescribe prudential limits on the amount of individual housing loans that can be extended by Primary (Urban) Co-operative Banks (UCBs), and Rural Cooperative Banks (RCBs – State Cooperative Banks and District Central Cooperative Banks) to their customers.
Accordingly, the limit for StCBs/DCCBs having assessed net worth less than ₹100 crore t shall stand revised from 20 lakh to ₹50 lakh and for the StCBs/DCCBs having assessed net worth equal to or more than ₹100 crore it shall be ₹75 lakh.
Further, it has been decided to allow State Co-operative Banks (StCBs) and District Central Co-operative Banks (DCCBs) to extend finance to Commercial Real Estate-Residential Housing (CRE-RH) within the existing aggregate housing finance limit of 5% of their total assets. For this purpose, CRE-RH shall consist of loans to builders/developers for residential housing projects (except for captive consumption). Such projects should ordinarily not include non-residential commercial real estate.
However, integrated housing projects comprising some commercial space (e.g. shopping complex, school, etc.) can also be classified under CRE-RH, provided that the commercial area in the residential housing project does not exceed 10% of the total Floor Space Index (FSI) of the project. Standard asset provision of 0.75% and risk weight of 75% shall be maintained for CRE-RH advances.
