MUMBAI: In an offer to build a credit flow for the real estate sector, the reserve bank on Friday defended the risk weight for the LTV (Loan to Value) portion for all new home loans approved by Walk 31, 2022 The RBI announced that new Home loans will have a 35 percent hazard weight if the LTV is below 80% and a 50% hazard weight if the LTV is more than 80% and yet below 90%.
This measure, as indicated by the RBI, is used as the basis for bank loans to the real estate sector, which are fundamental to financial recovery due to their working-age function and the associated links with various companies.
“As a countercyclical measure, it has been decided to rationalize the risk weights, irrespective of the amount. The risk weights for all new housing loans to be sanctioned on or after the date of this circular and upto March 31, 2022,” the notice said.