RBI tweaks norms to boost affordable housing lending
- RBI has made changes in PSL norms to boost affordable housing.
- RBI has increased the loan limit of priority sector lending (PSL).
- The change in norms are:
- For metropolitan areas, loan limits have been raised from Rs 28 lakh to Rs 35 lakh, and
- For other areas, loan limits have been raised from Rs 20 lakh to Rs 25 lakh.
- The overall cost of the home does not exceed Rs 45 lakh and Rs 30 lakh respectively.
- Banks may tighten loan to value ratio (amount of loan to the total cost of a house) or increase the risk weight if there is a need.
- However according to RBI analysis, NPA (Non-performing assets) for housing loan data has been increasing.
- To address the issue, banks need to strengthen screening and follow-up measures.