What are the proposed changes to unsecured advances for Urban Cooperative Banks (UCBs) by the RBI?

The RBI has proposed to double the aggregate ceiling for unsecured advances for UCBs to 20% of their total assets.

How will housing loan rules change for different UCB tiers under the new RBI draft?

Tier 3 and Tier 4 UCBs can set their own housing loan tenures and moratorium periods, while Tier 1 and Tier 2 UCBs will have a maximum loan tenor of 20 years with an 18-month moratorium.

What is Mission-SAKSHAM, and who will it train?

Mission-SAKSHAM is a capacity-building program launched by the RBI to train over 1.4 lakh personnel working in Urban Cooperative Banks.

Home / Business and Economy / RBI Boosts UCB Lending: Unsecured Advances Double

RBI Boosts UCB Lending: Unsecured Advances Double

11 Feb

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Summary

RBI proposes doubling unsecured advances for UCBs to 20% of assets.
Enhanced individual loan limits and housing loan deregulation introduced.
Mission-SAKSHAM to train over 1.4 lakh UCB personnel.

RBI Boosts UCB Lending: Unsecured Advances Double

The Reserve Bank of India (RBI) has introduced draft amendments to lending regulations for Urban Cooperative Banks (UCBs). A key proposal is to increase the aggregate ceiling for unsecured advances to 20% of total assets, effectively doubling the current limit. This move aims to bolster the lending capacity of UCBs.

Further, the draft directives include enhanced individual loan limits and greater flexibility in housing loans for Tier 3 and Tier 4 UCBs. These banks will be empowered to set their own terms for housing loan tenures and moratorium periods, based on board-approved policies.

However, Tier 1 and Tier 2 UCBs will maintain a maximum housing loan tenor of 20 years, including an 18-month moratorium. Revised individual unsecured loan limits are also proposed, ranging from Rs 5 lakh for Tier 1 to Rs 10 lakh for Tier 3 and Tier 4 UCBs.