India cbank eases rules for low-cost home loans

[MUMBAI] India's central bank has eased norms to fund low-cost housing by permitting banks to extend loans against long-term infrastructure bonds.

The Reserve Bank of India however barred lenders from providing loans against long-term infrastructure bonds issued by other banks.

"Further, such loans should be subject to a ceiling, say, 10 lakh rupees (US$16,170) per borrower, and tenure of loan should be within the maturity period of the bonds," the central bank said in a circular.

In July, the RBI had allowed long-term bonds raised by banks for infrastructure lending to be exempted from mandatory reserve requirements.

REUTERS