The Reserve Bank of India (RBI) today said that co-operative banks cannot give housing loans beyond 5 per cent of their total assets.
Earlier, State cooperative banks (StCBs) and central cooperative banks (CCBs) were allowed to extend housing finance up to 10 per cent of their total loans and advances.
These banks, with exposure in excess of the new limits, have been asked to initiate steps to bring it down to the revised limits within six months.
"It has been decided that the exposure of StCBs and CCBs to housing finance would, henceforth, be limited to 5 per cent of their total assets, as against 10 per cent of their total loans and advances," an RBI notification said.
The assets of StCBs and CCBs may be reckoned, based on the audited balance sheet as on March 31 of the preceding financial year, it said.
The decision would curtail exposure of such lenders to real estate.
The revised limit of credit exposure for housing would be applicable with immediate effect.
The StCBs and CCBs were earlier allowed to give house loan to an individual borrower up to Rs 20 lakh. In case of a bank having a net worth of Rs 100 crore and above, the limit was Rs 30 lakh.
