RBI reduces standard assets provisions to 0.25 per cent, risk weights on lending to make new home loans cheaper
The Reserve Bank of India on Wednesday reduced the standard assets provisions on individual housing loans to 0.25 per cent and also lowered the risk weights on such lending. These decisions can make new home loans cheaper.
“As a countercyclical measure, the LTV (loan to value) ratios, risk weights and standard asset provisioning rate for individual housing loans” have been reviewed from today, the RBI said in the second bi-monthly policy statement.
The standard asset provisions, or the amount of money to be set aside for every loan made, has been lowered to 0.25 per cent from the earlier 0.40 per cent, which will help reduce the interest rates on home loans.