Central Bank Relaxes Bank Loan Norms for Low-Cost Housing

The bank has said that cost of registration and stamp duty should be paid by the borrower only if the total cost of a house is not above one million rupees.

Published: 06th March 2015 11:34 AM  |   Last Updated: 06th March 2015 11:34 AM   |  A+A-

MUMBAI: India's central bank has allowed lenders to add the cost of registration and stamp duty in the total cost of a house valued at not more than 1 million rupees ($16,000) for determining the maximum loan the property can get, in a move aimed at boosting availability of affordable housing.

"It has been brought to our notice that these amounts form around 15 percent of the cost of the house and place a burden on the borrowers from economically weaker sections and low-income groups," the Reserve Bank of India said in a statement on its website late on Thursday, announcing the change.

Banks in India typically finance up to 85 percent of the cost of a property, while buyers are required to pay the remainder.

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