The Reserve Bank has taken steps to increase the role of urban and rural cooperative banks in public life. The announcement for them is a bunch of credit policy reviews. On the one hand, the maximum limit for giving home loans to cooperative banks has been increased. Rural Cooperative Banks, on the other hand, are allowed to lend on housing projects. They also instructed the urban co-operative banks to provide services at the customer’s home.
A co-operative ministry was created by the central last year to bring development to the people of the lower strata through co-operative banks and cooperative organizations. Amit Shah was given the responsibility. He was associated with the Cooperative Bank of Ahmedabad in Gujarat. Since then, the centre has jumped in to boost the cooperative sector. 900 crores are allocated in the budget. Work is now underway to connect all the cooperative bank-organizations in the country through the Center and NABARD on an average.
Last week, the cabinet also gave clearance to cooperative organisations to buy products through the Centre’s Gem Portal. According to government officials, today’s announcement by the top banks is also an attempt to bring cooperative banks into the mainstream of the banking industry as well as pave the way for them to increase their income. So the scope of lending was increased.
Announcement by the RBI
According to the RBI’s announcement, there will be 100% more loans than before from Urban Cooperative Banks for building or buying flats or apartments. In case of Rural Cooperative Banks, it has been increased by 250%. For so long they could only give home loans to cooperative members. This time it will also be able to pay the construction companies for the commercial housing project. That capital must be within five percent of the total loan.
On the same day, RBI Governor Shaktikanta Das said, Cooperative banks have an important role to play in solving housing problems, especially in rural areas. With that in mind, this is a step towards increasing their participation in home loans. Experts claim that the borrowers will absolutely benefit from this. Along with them, Cooperative banks will also benefit. That will benefit the housing industry. However, Samir Ghosh, former chairman of West Bengal State Co-operative Bank, said, “It is also important to take effective measures to recover the loan. Many cooperative banks have been in trouble in the past for not repaying their loans.”
Now, if the total deposits of urban cooperative banks are within Rupees 100 crore, they can give home loans up to a maximum of Rupees 30 lakhs. If the deposit is more than Rupees 100 crore, then up to Rupees 70 lakhs. Which has increased to Rupees 60 lakhs and Rupees 1.40 lakh crore respectively. Now, if the net assets of Rural Cooperative Bank are within Rupees 100 crore, the home loan can be given a maximum of Rupees 20 lakhs and if it is more than 100 crore rupees, the home loan can be of 30 lakhs. It has increased to Rupees 50 lakhs and Rupees 75 lakhs respectively.