Banks reduce lending home loan on property valuation

According to the sources from the banking industry, the banks have created more stringent norms for lending home loans to potential borrowers, based on land valuation.

A more stringent set of norms have been set for property valuation and most banks use the "Ready Reckoner", a government issued document listing the price of the property based on the stamp duty paid by the buyers in a specific area for valuation of property.

According to media reports, all banks are bringing down their exposure in real estate. Some banks now finance up to 80 per cent of the cost of the property as against 90 per cent of the cost of the property.

Some banks also insist on bank statements of a relative if a personal loan has been taken for the down payment.