According to the new rulings from the Reserve Bank of India, customers will now need to arrange around 20-30% of the property value before they could avail home loans. The apex bank has also instructed the lenders to discontinue inclusion of stamp duty and registration charges to the cost of property. Such practices lead to increase in the value of property.
In a circular RBI said, "It has been brought to our notice that banks adopt different practices for deciding the value of the house property while sanctioning housing loans. Some banks include stamp duty, registration and other documentation charges in the cost of the house property."It also said, "Accordingly, banks should not include these charges in the cost of the housing property they finance so that the effectiveness of Loan to Value (LTV) norms is not diluted."