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Bonanza for builders
"Banks can issue long-term bonds with a minimum maturity of seven years to raise resources for lending to long term projects in infrastructure sub-sectors and affordable housing," RBI said. Further, the apex financial institution issued instructions to banks specifying operational guidelines and incentives in the form of flexibility in loan structuring and refinancing.
Lending for affordable housing means loans eligible under priority sector, and loans up to Rs 50 lakh to individuals for houses costing up to Rs 65 lakh located in the six metro cities. For other regions, it covers loans up to Rs 40 lakh for houses valued up to Rs 50 lakh. This move will significantly enhance the flow of funds for builders of affordable housing projects and infra projects.
To boost infrastructure development as well as affordable housing, the Reserve Bank of India (RBI) today exempted long-term bonds from mandatory regulatory norms such as cash reserve ratio (CRR), statutory liquidity ratio (SLR) and priority sector lending (PSL), if the money raised is used for funding of such projects.Banks can issue long-term bonds with a minimum maturity of seven years to raise resources for lending to long term projects in infrastructure sub-sectors and affordable housing, RBI said. Further, the apex financial institution issued instructions to banks specifying operational guidelines and incentives in the form of flexibility in loan structuring and refinancing. Lending for affordable housing means loans eligible under priority sector, and loans up to Rs 50 lakh to individuals for houses costing up to Rs 65 lakh located in the six metro cities. For other regions, it covers loans up to Rs 40 lakh for houses valued up to Rs 50 lakh. This move will significantly enhance the flow of funds for builders of affordable housing projects and infra projects.