RBI relaxes norms for residential real estate

The Reserve Bank of India (RBI) has decided to relax norms for residential housing projects by lowering the standard asset provisioning requirement and risk weight for loans given to those projects. The move is aimed at boosting demand for this segment. With risk weight and provisioning requirement coming down, banks will now charge lower interest rates for such loans.

Earlier, residential housing projects were under the commercial real estate (CRE) category, which attracted higher risk weight and standard asset provisioning because the regulator considered it a sensitive sector. Now, RBI has decided to carve out a sub-sector within CRE as Residential Housing (CRE-RH)