The Hindu Business Line : RBI for flexible home loan repayment norms

FOR MORE FLEXIBILITY: Dr Rakesh Mohan, Deputy Governor, RBI, and Mr P.P. Mitra, Economic Advisor, Ministry of Finance, at a seminar on `Affordable Housing for All' in Mumbai on Saturday. — Shashi Ashiwal

Mumbai June 2 The repayment of housing loans should be flexible enough to take into account the income flows of individuals, said Dr Rakesh Mohan, Deputy Governor, RBI.

"There is a need for standardisation of procedures and documents in the area of housing finance. There should also be flexibility in collection systems," he said, speaking at a seminar on `National Conference on Affordable Housing' here on Saturday.

Dr Mohan's observation comes on the heels of an RBI notification issued in May advising banks to consider having a ceiling on the interest rate besides processing and other charges on housing loans.

Dr Mohan also said the notion that there were higher non-performing assets in the case of housing loans taken by the lower income segment of the population should not be spread around unless supported by data. "Spreading such a suspicion without data is not a good idea," he said.

Emphasising the favourable repayment experience for the Ahmedabad-based Shri Mahila Sewa Sehkari Bank Ltd, Ms Jayashree Ben Vyas, Managing Director, said that in the 30 years of the existence of the bank, Rs 200 crore had been advanced as housing finance and the recovery rate was 97 per cent. "Around 50 per cent of our loans go for housing- related expenses, mainly for adding services, repair or extension work," she said.

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RBI for flexible home loan repayment norms