By Shashank Didmishe,
The Reserve Bank of India on Wednesday doubled the amount of loans that urban co-operative banks (UCBs) can issue for housing. The revision is carried out in order to take into account the increase in house prices.
The central bank allowed cooperative banks to extend home banking services to their customers. “This will enable UCB to meet the needs of its customers, especially the elderly and the disabled,” the RBI said.
In addition, rural cooperative banks can issue loans for residential housing projects. The maximum amount of loans that these banks can issue is 5% of their total assets. The move measure will improve credit flows from co-operative banks to the housing sector, the RBI said.
“The big announcement was to raise the ceiling on loans to state cooperative banks and district central cooperative banks to the housing sector. The housing sector is a capital-intensive business, these measures will meet the growing need for affordable housing, providing easy and higher limits with enough funding opportunities for projects,” said Nitin Bavisi, Chief Financial Officer, Ajmera Realty.
“It will improve the flow of credit to the sector and also boost housing projects in rural areas, thereby ensuring recovery in all pockets of the country,” he added.