CII Communique - December, 2010

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prevent excessive leveraging by banks, the upper limit
for loan to value ratio with respect to housing loan has
been fixed at 80%.
Risk Weights on Residential Housing Loans: To
increase the risk weight for residential housing loans
of Rs 75 lakh and above, irrespective of the LTV ratio,
to 125%.
Teaser Rates for Housing Loans: To increase the
standard asset provisioning by commercial banks for
all such loans to 2%.
Banks’ Investments in Non-Financial Companies:
Stipulating prudential limits to regulate the investments
of banks in companies engaged in forms of business
other than financial services. Banks will be required to
review their investments in such companies and be
compliant with the guidelines as per the roadmap to
be laid down.
Prudential Norms on Financial Conglmerates: To
implement the recommendations of the Group on
(i) capital adequacy for FCs; and (ii) intra-group
transactions and exposures in FCs.
Principles for Enhancing Corporate Governance
in Banking Organisations: to take appropriate
steps to fully align corporate governance practices
in banks in India with the principles enunciated by
the BCBS.
Compensation Practices: To issue final guidelines on
compensation practices by end-December 2010.
Licensing on New Banks: To put the draft guidelines
of licensing of new banks in the public domain by end-
January 2011 for public comments.
Institutional Developments
• Increasing the threshold limit for real time gross
settlement system (RTGS) transactions from the
present limit of Rs 1 lakh to Rs 2 lakh.
• Accepting the report of the Group on next generation
RTGS.
• Planning the next roll out of cheque truncation system
in March 2011 at Chennai.
Communiqué December 2010 | 21