Co-operative Banks Home Loan Limit: Get up to Rs 1.4 Crore – Check RBI Ruling

Cooperative Bank home loan limit: The Reserve Bank of India announced on Wednesday, June 8, 2022 that it has decided to increase the limit on individual housing loans issued by cooperative banks.

According to the RBI’s bi-monthly development and regulatory policy statement released today, the new home loan limits for Tier I and Tier II urban co-operative banks will be Rs 60 lakh and Rs 1.4 crore respectively. Previously, the limit for UCB Tier I was Rs 30 lakh and for UCB Tier II it was Rs 70 lakh.

Similarly, the limit for home loans has been increased from Rs 20 lakh to Rs 50 lakh
for Rural Cooperative Banks (RCB) with an estimated net worth of less than Rs 100 crore. For other RCBs, the home loan limit has been increased from Rs 30 lakh to Rs 75 lakh.

According to the RBI statement, existing guidelines prescribe prudential limits on the amount of individual home loans that can be made by UCBs and BCRs to their customers. These limits were last revised for UCBs in 2011 and for RCBs in 2009.

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The BCRs include State Cooperative Banks and Central District Cooperative Banks.

“In view of the increase in house prices since the last revision of the limits and taking into account the needs of the customers, it has been decided to increase the existing limits on individual loans for housing by the cooperative banks. As a result, the Tier I/Tier II UCB limits will be revised from ₹30 lakh/₹70 lakh to ₹60 lakh/₹140 lakh, respectively. RCB whose estimated net worth is less than ₹100 crore; and ₹30 lakh to ₹75 lakh for other RCBs,” the RBI said.

“A detailed circular will be issued separately,” he added.

Meanwhile, the RBI today raised the repo rate by 50 basis points. The decision is expected to lead to an increase in loan rates offered by banks and also increase the burden on borrowers for EMIs for home loans.