Blitz Bureau
NEW DELHI: The Reserve Bank of India (RBI) has decided to raise the aggregate ceiling for unsecured loans given by urban co-operative banks to 20 per cent of total advances, from the existing limit of 10 per cent of total assets in the revised draft norms released on February 11. The limits for individual unsecured advances within the aggregate ceiling of unsecured advances have been fixed at Rs 5 lakh for Tier 1, Rs 7.5 lakh for Tier 2, and Rs 10 lakh for Tier 3 and Tier 4 urban co-operative banks (UCBs).
The limit for lending to nominal members for the purchase of consumer durables is also proposed to be enhanced to Rs 2.5 lakh per borrower.
The draft norms state that the tenor of housing loans for Tier 1 and Tier 2 will not exceed 20 years, including the moratorium period, while Tier 3 and Tier 4 are permitted to determine the tenor of housing loans as per their board-approved policies.
The credit policy of a UCB must specify risk management and pricing strategies for housing loans, considering the life expectancy of the borrower and the longer duration of these exposures.
Feedback on the draft can be submitted on or before March 4, 2026. The amendments will come into force from October 1, 2026, or an earlier date when adopted by a UCB in entirety, the RBI statement said. The moratorium on housing loans is extended only for the purpose of the construction of houses and shall not be allowed for loans for the acquisition of completed houses.
