The Reserve Bank on Monday said aggregate exposure of Urban Co-operative Banks to residential mortgages (housing loans to individuals) should not exceed 25 per cent of their total loans and advances, a move aimed at providing greater operational freedom to the lenders.
In terms of extant instructions, aggregate exposure of a UCB to housing, real estate and commercial real estate loans is capped at 10 per cent of its total assets. The ceiling of 10 per cent can be exceeded by an additional 5 per cent of total assets for the purpose of granting housing loans to individuals.
The RBI has issued revised prudential norms with a view to give greater operational flexibility to UCBs without diluting the regulatory objectives.
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