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Oct 09, 2015
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RBI reduces risk weights on home loans
In a move that could give some breather to the realty sector and home loan borrowers, the Reserve Bank of India (RBI) has eased risk weights on loans of up to Rs 75 lakh, provided the borrower brings in a bigger contribution towards financing the property. Reduction in risk weights entails lower provisioning for banks and, thus, frees up more funds for lending.
In a notification on Thursday, the central bank prescribed lower risk weights on home loans where the loan-to-value (LTV) ratio is lower by 5-10 basis points. Home loans of up to Rs 30 lakh where the LTV ratio is less than or equal to 80% and those of Rs 30-75 lakh wherein the loan to value ratio is below or equal to 75% will attract a lower risk weight of 35% instead of 50% earlier.
Source -
http://www.financialexpress.com
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