RBI increases mortgage, loan ceilings for urban co-operative banks, ET BFSI

Reserve Bank of India (RBI) has elevated the mortgage ceiling for city co-operative banks (UCBs) to small worth prospects to 0.40% of their Tier I capital from 0.20% earlier and Rs 3 crore per borrower from Rs 1 crore earlier. These banks have additionally been allowed to take combination publicity of a to residential mortgages (housing loans to people), to 25% of its complete loans up from 5% earlier, the RBI mentioned.

Complete publicity of a UCB to residential mortgages (housing loans to people), aside from these eligible to be labeled as precedence sector, has additionally been elevated to 25% of its complete loans and advances. This ceiling was earlier capped at 10% of complete belongings to housing, actual property and business actual property loans with an extra 5% of complete belongings for housing loans to precedence sector which incorporates small worth house loans.

Combination publicity of a UCB to actual property sector, excluding housing loans to people, shall not exceed 5% of its complete loans and advances, RBI mentioned.

Ceilings for particular person housing loans have been set at Rs 60 lakh per particular person borrower for small UCBs, progressively growing to Rs 1.40 crore per particular person borrower, Rs 2 crore and Rs 3 crore for the most important UCBs, the RBI mentioned.

UCBs have additionally been given two extra years to supply for the valuation differential on the safety receipts (SRs) held in opposition to the belongings transferred by them to ARCs, from a five-year glide path (until FY2025-26) was offered in June 2022, which can now be prolonged to 2027-28.