RBI asks banks not to overstate value of realty | Latest News India - Hindustan Times
close_game
close_game

RBI asks banks not to overstate value of realty

Hindustan Times | By, Mumbai
Feb 03, 2012 09:55 PM IST

The Reserve Bank of India (RBI) on Friday came hard on banks for overstating realisable value of real estate properties they finance by including charges such as stamp duty and other levies. HT reports.

The Reserve Bank of India (RBI) on Friday came hard on banks for overstating realisable value of real estate properties they finance by including charges such as stamp duty and other levies.

HT Image
HT Image

The RBI said the banks should not include these charges in the cost of the housing property they finance so that the effectiveness of loan to value (LTV) norms are not diluted.

Hindustan Times - your fastest source for breaking news! Read now.

"It has been brought to our notice that banks adopt different practices for deciding the value of the house property while sanctioning housing loans. Some banks include stamp duty, registration and other documentation charges in the cost of the house property," the RBI said in a circular.

The RBI had in 2010 issued guidelines directing the lenders to provide loans only up to 80 % of the cost of property.

As per the rule, a homebuyer will have to arrange at least 20% of the property value on his own before seeking loan from a bank.

Unveiling Elections 2024: The Big Picture', a fresh segment in HT's talk show 'The Interview with Kumkum Chadha', where leaders across the political spectrum discuss the upcoming general elections. Watch now!

Get Current Updates on India News, Election 2024, Arvind Kejriwal News Live, Bihar Board 10th Result 2024 Live along with Latest News and Top Headlines from India and around the world.
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Thursday, March 28, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On