Banks To Keep 3% Incremental Funds For Housing

The Reserve Bank of India (RBI) has directed all the commercial banks to allocate 3 per cent of their incremental deposits for housing finance.

"Each bank should continue to compute its share of housing finance at 3 per cent of its incremental deposits as on the last reporting Friday of March 2001 over the corresponding figure of the last reporting Friday of March 2000 for the current financial year," RBI said in a letter sent to the chiefs of all commercial banks.

This, however, is the minimum housing finance allocation and there is no objection to banks exceeding this level, having regard to their resources position, RBI said.

 

Banks may deploy their funds under the housing finance allocation in any of the three categories, that is, direct finance, indirect finance or investment in bonds of the National Housing Bank or the Housing and Urban Development Corporation, the letter said.

"For the purpose of monitoring the macro level performance of commercial banks in disbursement of housing finance vis-a-vis their housing finance allocation, banks should continue to submit to us, on a quarterly basis, commencing from the quarter ended June 30, 2001, details of disbursements made by them towards housing finance, as per the format enclosed to our circular under reference within 20 days from the close of the respective quarter," the RBI statement read.