RBI relaxes loan norms for EWS
Relaxing a norm that had been implemented since 2012, which stipulated that commercial banks should not include stamp duty, registration and other documentation charges in the cost of housing property so that the effectiveness of Loan to Value (LTV) ratio is not diluted, in the cases relating to housing loans, RBI said as these amounts form around 15 per cent of the cost of the house and place a burden on the borrowers from economically weaker sections (EWS) and low income groups (LIG), with a view to encourage availability of affordable housing to such borrowers, it has been decided that in cases where the cost of the house does not exceed `10 lakh, banks may add stamp duty, registration and other documentation charges to the cost of the house to calculate LTV ratio.
RBI also advised
banks that in cases of projects sponsored by Government/Statutory Authorities,
they may disburse the loans as per the payment stages prescribed by such
authorities, even where payments sought from house buyers are not linked to the
stages of construction, provided such authorities have no past history of
non-completion of projects.
This is in relation to a circular issued by the apex bank, in in September 3, 2013 on "Housing Sector: Innovative Housing Loan Products – Upfront disbursal of housing loans”, requiring banks to disburse housing loans closely linked to the stages of construction of the housing project/houses and upfront disbursal should not be made in cases of incomplete/ under-construction/ green field housing projects.
RBI took this stand as some banks have represented that they are not able to extend home loans to the allottees in the project developed by Government Bodies/ Statutory Housing Authorities, as the payment schedule prescribed by such authorities are not linked to the stages of construction. Such authorities allot flats to the individual allottees in two payment modes that include one-time lump-sum payment within 1 to 3 months after allotment and time linked payment plan not linked to the stages of construction.