RBI notifies reduce in risk weightage for home loans

Mumbai, May 3 (UNI) The Reserve Bank of India (RBI) today reaffirmed its decision to reduce the risk weight on housing loans upto Rs 20 lakh to 50 per cent from the earlier 75 per cent.

The reduced risk weights will be reviewed after one year keeping in view the default experience and other relevant factors, a RBI notification said here today.

The central bank, in its annual monetary policy announced on April 24, had announced its decision on risk weight reduction, which has been reaffirmed through the official notification published on its websites today and has been addressed to 'all Commercial Banks excluding regional rural Banks'.

According to senior bankers, the move from the central bank is expected to boost up the hoan loan segment by making it feasible to the average citizens aspiring for home loans.

The RBI in its annual policy had also announced the risk weight reduction on loans up to Rs 1 lakh against gold and silver ornaments to 50 per cent from the existing level of 125 per cent for all categories of banks.

UNI