The Reserve Bank of India (RBI) on 23rd June 2022 doubled the limit on home loans issued by urban cooperative banks (UCB). With this, tier-I UCBs can issue individual housing loans of up to Rs 60 lakh while tier-II UCBs are allowed to offer loans of up to Rs 1.4 crore. Taking into account the increase in housing prices since the limits were last revised and considering the customer needs, it has been decided to increase the existing limits on individual housing loans by cooperative banks.The central bank has also revised the prudential lending norms for these banks. According to the circular, the RBI has reduced the exposure limits of UCBs to a group of connected borrowers to 25% of its total tier-I capital from 40% earlier. The exposure limit for a single borrower for UCBs remains at 15% of the tier-I capital. The exposure of UCBs to housing, real estate and commercial real estate loans is limited to 10% of their total assets.UCBs cannot charge foreclosure charges or pre-payment penalties on home loans extended on a floating interest rate basis. Housing loans issued by UCBs should be repayable within a maximum period of 20 years.The central bank also allowed rural cooperative banks to issue loans for residential housing projects. The move is aimed at improving credit flows from cooperative banks to the housing sector.For Further : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12344&Mode=0