RBI Home Loan Rules: Owning a house is still a big dream for many people, especially in villages and small towns. The Reserve Bank of India now wants to make that dream a little easier to reach. It has put out draft rules for rural cooperative banks that would let them give much bigger home loans than before. The idea is to help more customers get housing finance from the banks they already trust and use.
Bigger Loan Limits for Different Banks
The biggest change is the size of the home loans. RBI has suggested different limits based on how much deposit money a rural cooperative bank has. Banks with deposits above Rs 10,000 crore may be allowed to give home loans of up to Rs 3 crore to one borrower.
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Banks with deposits between Rs 1,000 crore and Rs 10,000 crore could lend up to Rs 2 crore. Banks with deposits from Rs 100 crore to Rs 1,000 crore may offer up to Rs 1.4 crore. Smaller banks with deposits below Rs 100 crore could lend up to Rs 60 lakh. These higher limits are meant to help families buy or build homes without running from one lender to another.
Easier Repayment and Wider Sccess
RBI is also planning more freedom in repayment. Rural cooperative banks with deposits above Rs 1,000 crore may be allowed to set loan tenure through board-approved policy. Other cooperative banks could offer home loans for up to 20 years, and that period would include the moratorium.
For people buying homes that are still under construction, the draft also allows a moratorium of up to 24 months before normal repayments begin. The draft rules also open the door for nominal members of rural cooperative banks to borrow, if local cooperative laws allow it. Such loans may be given against fixed deposits, gold or silver jewellery, life insurance policies, or government securities.
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Stricter Risk Rules
Along with easier lending, RBI also wants tighter safety rules. The draft says exposure to a single borrower or institution cannot be more than 20% of a bank’s Tier 1 capital. Exposure to a group of connected borrowers would be capped at 25% of Tier 1 capital. Unsecured loans would be limited to 15% of the total loan portfolio.
Exposure to the real estate sector would be capped at 15% of total advances, and only 5% of that could go into non-housing real estate work. RBI released the draft rules on August 6, 2026. People can share their views until August 28, 2026. If approved, the new rules may start from April 1, 2027.
