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Urban and Rural Cooperative Bank Home Loan limits have been increased by RBI.

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Cooperative Bank Home Loan Limit: The Reserve Bank of India on Wednesday (June 8, 2022) said it has has decided to increase the limit of individual housing loans provided by cooperative banks.

According to the RBI’s bi-monthly Statement on Developmental and Regulatory Policies’ released today, the new home loan limits for Tier I and Tier II Urban Cooperative Banks (UCBs) will be Rs 60 lakh and Rs 1.4 crore respectively. Earlier, the limit for Tier I UCB was Rs 30 lakh and for Tier II UCB it was Rs 70 lakh.

Similarly, the housing loan limit has been increased from Rs 20 lakh to Rs 50 lakh
for Rural Cooperative Banks (RCBs) with assessed net worth less than Rs 100 crore. For other RCBs, the home loan limit has been increased from Rs 30 lakh to Rs 75 lakh.

According to the RBI statement, the extant guidelines prescribe prudential limits on the amount of individual housing loans that can be extended by UCBs and RCBs to their customers. These limits were last revised for UCBs in 2011 and for RCBs in 2009.

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The RCBs include State Cooperative Banks and District Central Cooperative Banks.

“Taking into account the increase in housing prices since the limits were last revised and considering the customer needs, it has been decided to increase the existing limits on individual housing loans by cooperative banks. Accordingly, the limits for Tier I /Tier II UCBs shall stand revised from ₹30 lakh/ ₹70 lakh to ₹60 lakh/ ₹140 lakh, respectively. As regards RCBs, the limits shall increase from ₹20 lakh to ₹50 lakh for RCBs with assessed net worth less than ₹100 crore; and from ₹30 lakh to ₹75 lakh for other RCBs,” the RBI said.

“A detailed circular will be issued separately,” it added.

Meanwhile, the RBI today hiked repo rate by 50 bps. The decision is expected to lead to an increase in lending rates offered by banks and also increase the home loan EMI burden of borrowers.

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