The interest rate cuts in the home loan market in India have helped in the revival of the real estate sector. Despite this, availing a home loan has become difficult for a prospective customer. This is because approval for home loan has just got a little tougher.

Taking heed from the global crisis, banks are rechecking the insatllment to income ratios. This ratio determines the EMI (equated monthly instalment) of an individual. Earlier the banks extended this EMI on the loan to an extent of 50 percent of the monthly salary. Now the ratio ranges between 30-50 percent. Renu Sud Karnad, joint MD, HDFC said that it was not advisable to have a single number.

Most of the banks are taking into account only the recurring income of the potential buyer to calculate the monthly instalment. Praveen Kutty, executive V-P and head, retail banking, Development Credit Bank said, "Banks are no longer looking benevolently at other sources of income such as performance bonus, variable pay, while computing the instalment to income ratio."

Kotak Mahindra bank reckons the EMI on the basis of the monthly income only. Kamlesh Rao, executive V-P, Kotak Mahindra Bank said that the bank did not consider other incomes like bonus since that might not be there for every year. Some banks are assigning the ‘installment to income' ratio according to the sector so that there is consistency in the loan disbursals.

Analysts say that the banks are doing this to improve their risk management. "Some time back, capital was hard to come by. Banks did not want to set aside huge amounts towards lending because if delinquencies arose, they would have had to make provisions for those," says Clyton Fernandes of Anand Rathi Financial Services.

Apart from asking for documents like IT returns of three years, PAN (Permanent Account number) copy, banks are looking into details like passbook entries to check withdrawal patterns.

Rao also said that the banks like them were tracking CIBIL (Credit information bureau India ltd) list to check the credit card payment history.