Reserve Banks allows Loan against housing bonds
For an affordable housing and infrastructure Reserve Banks allowed all banks to give loan against housing bonds issued by them. This makes loan borrowers pleased.
Proclamation by Reserve Bank of India
Many of retail investors make investment in long-term housing bonds (type of bond to finance for housing development) to get financing affordable housing and infrastructure. Banks need to give liquidity to them for that on Thursday Reserve Bank of India announced to give loan against this loans to people.
Necessary things taken care by banks while lending against bonds
To place a policy by boards of banks containing purpose of the loan, perfect margins and other safeguards says the central bank.
According to the maturity period of bonds the tenure of loans is deciding which less than maturity period of bonds is always. The loan provided to the borrower is to top limit for example, 15 lakh to a borrower.
Lending loans against other bank bonds is not possible. Always loans are given to the bonds issued by the same bank is permitting.
To build an affordable house or to improve infrastructure, a guidelines for banks have issued by banks in July to finance long-term loans provided by them as to increase the long-term resources. The main aim of this is to improve the side of supply as well as to encourage both stability and growth.
In long-term bonds seven years will be the least maturity period is stating in the guidance and along with unsecured creditors, other uninsured pari-passu rank will be there, unsecured and redeemable and full payments of bonds will be paying.
Categories of infrastructure sectors are
- Water and sanitation infrastructure
- Commercial and social infrastructure
- Energy infrastructure
- Transport infrastructure
Long-term bonds raising is for the purpose, the Reserve Bank of India defines providing loans to people to build or buy an affordable housing for value of house property up to Rs. 65 lakh is to up to Rs. 50 lakh. The above mentioned loan amount has been for 6 metropolitan centers such as Chennai, Mumbai, New Delhi, Bengaluru, Hyderabad and Kolkata. In rest of other centers it has decided for property worth Rs. 50 lakh amount of loan given by bank is Rs. 40 lakh to build or buy a beautiful house for family.
Article Source: The Hindu Business Line
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