Sources from the banking industry say that banks, both public and private sector ones are seeking advice on reworking the eligibility criteria for home loan disbursal. Presently, the cap is calculated based on the repayment capacity and other criteria.
Some banks may also rework loan applications on the possible future interest rate hikes and if the loan is for a second or third home, reputation of the builder and the stage of completion of the housing project. The consideration of all these norms have lowered the creditworthiness of potential borrowers.
Apart from public-sector banks, private banks also have plans to reconsider the home-to-income amounts, tightening it by 5-7 per cent.
Some banks are also unwilling to lend for an under-construction property and are becoming more particular about the past track record of the builder and pother relevant criteria.
Other sources also say that with property valuation dipping, the loan on offer has also shrunk.