RBI has also hiked with immediate effect, the risk weight for credit risk on capital market exposure to 125 per cent from 100 per cent, including direct investment by a bank in equity shares, convertible bonds and debentures and units of equity oriented mutual funds.
"The non-food credit growth has been significantly buoyant and is getting broadbased. However, the upswing continues to be driven by housing and real estate and hence a greater need to ensure credit quality," RBI said in its quarterly review of the annual policy for 2005-06.
RBI leaves interest rates unchanged
The increase in risk weight average includes fund based and non-fund based exposures secured by mortgages on commercial real estates and investments in mortgage backed securities and other securitised exposures.
During the mid-term review of the annual policy statement for 2004-05, the risk weight of banks on housing loans which are fully secured by mortgage of residential properties, and investments in mortgage backed securities of housing finance companies were increased by 25 per cent.
The increase in risk weightage for capital market exposure also includes advances against shares to individual for investment in equity shares, bonds and debentures, units of equity oriented mutual funds, secured and unsecured advances to stock brokers and guarantees issued on behalf of stock brokers and market makers.