The Reserve Bank on Wednesday decided to keep the policy rate (Repo rate) stable at 6.25 per cent in monetary review. However, he reduced the statutory liquidity ratio (SLR) by 0.5 percent to 20 percent. At the same time, the standard property provision on personal housing loan (home loan) has been reduced to 0.25 percent. This step can lead to cheaper home loan.
The Monetary Policy Committee (MPC), led by Reserve Bank Governor Urjit Patel, citing the risk of inflation due to the state’s agricultural debt waiver, did not make any changes in major policy rates, With the reduction of standard property provisions in the second bi-monthly monetary policy review, the Reserve Bank also reviewed the risk weightage, loan-price ratio (LTV) on such debt.
The intent of LTV is from the proportion of the value of the purchased property. According to the central bank, the risk weightage for personal housing loan of more than 75 lakh rupees has been reduced from 75 percent to 50 percent. At the same time, 80 percent single LTV ratio slab has been introduced with 35 percent risk weightage for loans between Rs 30 lakh and Rs 75 lakh.
Reserve Bank Governor Urjit Patel said that it is part of the effort of the Central Bank and Government to speed up economic growth and the target of targeted intervention. Industry disappointed on keeping key policy rates unchanged
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