With a view to reduce their burden, Indian banks have asked the RBI to relax the risk-weight norms on home loans upto Rs 20-lakh.

The banks on Thursday, January 15th, have requested the banking regulator to ease the risk-weight norms as it help banks to reduce their provisioning burden.

Presently banks have to maintain a risk-weight of 0.75% for home loans below Rs 20 lakh and thereby they have to make provisions accordingly while giving loans to the customers.

Indian Banks' Association's Chief Executive, K Ramakrishnan said, "They have suggested that the existing risk-weight on home loans to be removed, which would significantly bring down the provisioning burden on banks."

Further the banks are also expected to ask RBI governor, D Subbarao to relax the norms related to trade finance to export-oriented firms.

"With the global funding sources drying up in the wake of global financial turmoil, there is an increased pressure on Indian banks from all categories of companies for credit," said Ramakrishnan.

However he informed that the Indian banks have increased their lending during the current fiscal. Despite the slowdown, banks have witnessed a positive credit growth.

Presently the credit growth in the Indian Banking industry sand at around 24.5% as against the 22.4% growth recorded during the last fiscal.

Ramakrishanan informed that the credit-deposit ratio stands at 74.11%.