UCBs Can Lend Loan Up To Rs.25 Lakh in Priority Sector: RBI

The Reserve Bank of India (RBI) has permitted Urban Co-operative Banks (UCBs) to give home loans up to Rs.25 lakh under the priority sector lending. UCBs are allowed to use additional limit of 5% of their total assets for lending housing loans to individuals up to Rs.25 lakh.

The RBI in its monetary policy review in November 2010 said that all UCBs can lend up to 10% of their total assets to housing, real estate and commercial real estate and an additional limit of 5% for purchase and construction of dwelling units up to Rs.10 lakh. In May 2011, RBI permitted UCBs to use the additional 5% of their total assets for housing loans up to Rs.15 lakh.

Now, the central bank noticed that, due to high cost of dwelling units, UCBs are unable to use the additional limit of 5% of their total assets. So, it allowed UCBs to use additional limit of 5% of their total assets for home loans up to Rs.25 lakh.

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