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Individual Housing Loans: Rationalisation of Risk-Weights and Loan to Value (LTV) Ratios-RBI

Individual Housing Loans: Rationalisation of Risk-Weights and Loan to Value (LTV) Ratios

Reserve Bank of India

June 7, 2017

Individual Housing Loans: Rationalisation of Risk-Weights and Loan to Value (LTV) Ratios

RBI/2016-17/317
DBR.BP.BC.No.72/08.12.015/2016-17

June 7, 2017

All Commercial Banks
(Excluding Regional Rural Banks and Local Area Banks)

Madam/Dear Sir,

Individual Housing Loans: Rationalisation of Risk-Weights and Loan to Value (LTV) Ratios

Please refer to the Second Bi-monthly Monetary Policy Statement for 2017-18, announced today.

2. As a countercyclical measure, the LTV ratios, risk weights and standard asset provisioning rate for individual housing loans sanctioned on or after the date of this circular shall be as under:

Outstanding loan LTV ratio (%) Risk Weight (%) Standard Asset Provision (%)
Up to Rs.30 lakh < 80 35 0.25
> 80 and < 90 50
Above Rs.30 lakh and up to Rs.75 lakh < 80 35
Above Rs.75 lakh < 75 50

3.The LTV ratios, Risk Weights and Standard Asset Provision set out in the circular DBR.BP.BC.No.44/08.12.015/2015-16 dated October 8, 2015, on the captioned subject, shall continue to apply to loans sanctioned up to June 6, 2017.

4. All other instructions referred to in the above mentioned circular remain unchanged.

Yours faithfully,

(S.S. Barik)
Chief General Manager in-Charge

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