10 , April , 2022
In a recent development, the RBI has decided to extend the rationalised home loan norms by another year till March 31, 2023. This in turn will facilitate a higher credit flow of individual housing loans.
Earlier in October 2020, the RBI as a part of its countercyclical measure to cope with the COVID situation had rationalised the risk weights by linking them only with Loan to Value (LTV) ratios for all new housing loans sanctioned up to March 31, 2022.
Presenting the first bi-monthly monetary policy of the current fiscal, RBI Governor Shaktikanta Das informed that the risk weights for individual housing loans were rationalised by linking them only with LTV ratios for all new housing loans sanctioned up to March 31, 2022.
Observing the importance of the housing sector and its multiplier effects, it has been decided to extend the applicability of these guidelines till March 31, 2023, he stated.
Such loans will continue to attract a risk weight of 35 per cent where LTV is less than or equal to 80 per cent, and a risk weight of 50 per cent where LTV is more than 80 per cent but less than or equal to 90 per cent. The requirement of standard asset provision of 0.25 per cent will also continue to apply to all such loans.
Commenting on the RBI's decision, Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and PropTiger.com, said that despite inflationary pressures increasing, the RBI MPC has continued with its supportive approach to the economy and maintained a status quo on key lending rates.
By extending the applicability of LTV ratio till March 31, 2023, which will facilitate higher credit flow for individual housing loans, the RBI has recognised the importance of the housing sector and its multiplier effects on the economy," he said.
(WITH INPUTS TAKEN FROM PTI)
