“Moratorium period in housing loans may be permitted upto the date of completion of construction, subject to a maximum of 24 months from the date of first disbursement of the loan,” the guidelines said.
Relief for Homebuyers
However, the overall tenor of housing loans for these banks will continue to be capped at 20 years, including the moratorium period. The RBI has clarified that moratoriums will be allowed only for under-construction properties and not for loans taken to acquire completed houses.
Tier 3 and Tier 4 UCBs can determine the tenor and moratorium for housing loans according to their Board-approved policies. The RBI has, however, mandated that all UCBs clearly specify risk management and pricing strategies for housing loans in their credit policies, taking into account borrower life expectancy and the long-term nature of such exposures.
The central bank has also refined the definition of unsecured advances to mean loans not covered by the realisable value of a security, primary or collateral, over which the bank has valid recourse.
RBI said that loans given to salaried employees against personal guarantees can be treated as secured, provided there is a legally enforceable agreement among the bank, borrower and employer ensuring deduction of periodic loan instalments from salary.
Further, loans against receivables would also qualify as secured if such receivables have an original tenure of not more than 180 days.
Strengthening Credit Discipline
The aggregate unsecured loans and advances of a UCB cannot exceed 20% of its total loans and advances, as per the audited balance sheet of the previous financial year, the guidelines said.
However, unsecured loans up to Rs 50,000 per borrower that are eligible for priority sector classification and extended by UCBs compliant with eligibility criteria for business authorisation would be excluded from this prudential ceiling.
The RBI also has retained revised caps on individual unsecured advances within the overall limit, which was Rs 5 lakh for Tier 1 UCBs, Rs 7.5 lakh for Tier 2 and Rs 10 lakh for Tier 3 and Tier 4 banks.
The regulator also clarified norms relating to nominal members. UCBs may grant loans to nominal members only if their by-laws permit such lending in line with applicable co-operative laws.
“Permissible loans include consumer durable loans up to Rs 2.5 lakh and loans against deposits, gold and silver ornaments, life insurance policies and government securities, subject to Board-approved policies.”
Additionally, UCBs have been barred from sanctioning loans against fixed or term deposit receipts issued by other banks. Existing non-compliant loans may run off till maturity but cannot be renewed or enhanced unless aligned with the amended norms.