Comments
The real estate sector is expected to get a boost as the Reserve Bank of India (RBI) has decided to rationalise the risk weights and link them to LTV (loan-to-value) ratios only for all new housing loans sanctioned up to March 31, 2022.
Rationalisation of risk weights will bring down the capital that banks need to set aside for making a home loan. This, in turn, could help them reduce home loan rates.
Loan-to-value ratio is the amount of home loan a bank is willing to give as a percentage of the value of the property value.
Under the extant regulations, differential risk weights are applicable to individual housing loans, based on the size of the loan as well as the LTV.
“In recognition of the role of the real estate sector in generating employment and economic activity, it has been decided to rationalise the risk weights and link them to LTV ratios only for all new housing loans sanctioned up to March 31, 2022,” the RBI said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.