RBI warns cooperative banks against lending to real estate

“State and Central Cooperative Banks should desist from financing the commercial real estate sector,” the RBI said in a notification to the banks. The central bank said it has come to its notice that certain state cooperative and central cooperative banks have extended finance to the sector.

“Further, taking exposure in sensitive areas would not be in the interest of Short Term Cooperative Credit Structure,” it said. As regards the credit facilities already extended to the sector, the apex bank said it should be ensured that such exposures are well secured.