The Presidents/Chief Executive Officers,

All Microfinance Banks

Dear Sirs,

Housing Finance – Enhancement of Loan Limits for Microfinance Banks

Please refer to Regulation R-5 of the Prudential Regulations for Microfinance Banks.

2. In order to rationalize lending limits under ‘Housing Finance’ for MFBs, it has been decided to enhance the maximum loan size from Rs. 500,000 to Rs. 1,000,000. Moreover, the restriction to maintain 60% of housing portfolio within the loan limit of Rs. 250,000/- is also being removed.
3. However, MFBs shall develop related institutional capacity and appropriate mechanisms for monitoring the housing finance exposure. All other instructions on the matter will remain unchanged.
4. Please acknowledge receipt.