The recent increase in home loan rates has caused the defaults in this segment to rise significantly. Keeping this in mind, the RBI has taken few steps to get an idea about the extent of bad loans in the real estate segment.
The effect of the increased rates was felt extensively on the home loan EMI's which rose dramatically, forcing the budgets of middle class families to go haywire.

The Reserve Bank of India now wants to set a limit on to the level of the bad loans in the banking sector, especially for real estate.

It has sought details on standard advances in the sector from banks for three fiscals - 2001-02, 2002-03 and 2003-04. Written information regarding this matter was sent by RBI to some banks on September 14th, directing them to respond to queries by September 28th, bankers said. RBI has asked Banks to furnish the details of all the bad debts they generated during the years 2004-05, 2005-06 and 2006-07.

This exercise is also targeted at gaining a further insight into the impact of the USA and Europe subprime crisis on Indian real estate scenario.

RBI is the Central Bank in India, is a Monetary Authority and responsible for regulation and supervision of the financial system of the country. Banking and other financial institutions are directly regulated by RBI.