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RBI advice to banks on housing loans

By Our Special Correspondent

MUMBAI DEC. 12. The Reserve Bank of India Deputy Governor, Vepa Kamesam, today urged the banks not to cut corners to grow their housing loan portfolio. He also asked them to sanction loans only if all necessary documents are in place.

"We are happy that the housing loan portfolio has risen fast but banks must ensure that they do not cut corners in this process,'' Mr. Kamesam said while addressing the Bank Economists' Conference-2003, here, today. "At present we do not see any need to talk to banks. But if need be we will take up the issue,'' he added. Banks are expected to make sure that all documents are in place before sanctioning the loan.

Referring to the delinquency rate, he said at present it was not a concern. However, if the banks continue to grow assets by cutting corners, they would have higher non-performing assets (NPAs).

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