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Risk weights cut on home loans credit negative for banks: Moody's

RBI lowered risk weight for housing loans above Rs 75 lakh to 50% from earlier 75%

Press Trust of India  |  Mumbai 

The Reserve Bank's recent move to reduce risk weights and standard asset provisioning on individual housing loans are credit negative for the banking sector, says a report. In the second bi-monthly monetary policy review announced on June 7, RBI had reduced the LTV (loan to value) ratios, risk weights and standard asset provisioning rate for individual housing loans on the certain category for new customers. "The RBI's moves are credit negative for banks because lower capital requirements will weaken banks' protection from the housing sector, which has grown ...

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First Published: Thu, June 15 2017. 16:24 IST
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