CRGFTLIH Guaranteed Housing Loans: Zero Risk Weight & No NPA Provisioning
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2013-14/370 · issued 14 Nov 2013 · ~1 min read
Quick answerRBI allows Urban Co-operative Banks to assign zero risk weight to the guaranteed portion of housing loans backed by CRGFTLIH. For the non-guaranteed portion, standard risk weights apply. If such loans turn NPA, no provisioning is needed for the guaranteed part; only the excess requires provisioning as per norms.
What changed
RBI clarified that for housing loans guaranteed by the Credit Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH), UCBs can assign zero risk weight to the guaranteed portion. The balance beyond the guarantee attracts risk weight based on the counter-party. For NPAs, no provisioning is required on the guaranteed portion; only the excess amount needs provisioning as per existing guidelines.
What it means for you
This circular reduces capital charge and provisioning burden for UCBs on low-income housing loans backed by CRGFTLIH. It encourages banks to lend more to this segment by lowering risk-weighted assets and provisioning costs. Banks can improve capital efficiency and NPA management on such advances.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Update internal risk-weight models to assign zero risk weight to the CRGFTLIH-guaranteed portion of housing loans.
Ensure that for NPA loans, provisioning is applied only on the amount exceeding the guarantee, per extant norms.
Train credit and risk teams on the correct treatment of guaranteed vs. unguaranteed portions for reporting and provisioning.
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is CRGFTLIH?
It is a Credit Risk Guarantee Fund Trust set up by the Ministry of Housing & Urban Poverty Alleviation in 2012 to guarantee low-income housing loans.
Does this apply to the entire loan amount?
No. Only the portion guaranteed by CRGFTLIH gets zero risk weight and no NPA provisioning. The excess amount follows standard risk weight and provisioning rules.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #994: UBD.BPD.PCB.Cir.No.37/09.22.010/2013-14 — "Advances Guaranteed by Credit Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH) - Risk Weights and Provisi”
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/370
UBD.BPD.PCB.Cir No.37/09.22.010/2013-14
November 14, 2013
The Chief Executive Officer of
All Primary (Urban) Co-operative Banks
Dear Sir / Madam,
Advances guaranteed by Credit Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH) – Risk Weights and Provisioning
The Ministry of Housing & Urban Poverty Alleviation, Government of India has set up the Credit Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH) vide their Notification No.O-17034/122/2009-H dated June 21, 2012. On the issue of assignment of appropriate risk weight for loans guaranteed by CRGFTLIH, it has been decided as under:
i) Risk weight
UCBs may assign ‘Zero’ risk-weight to the guaranteed portion of the housing loan extended by them to eligible borrowers. The balance outstanding in excess of the guaranteed portion will attract a risk-weight as appropriate to the counter-party.
ii) Provisioning
In case the advance covered by CRGFTLIH guarantee becomes non-performing, no provisions need to be made towards the guaranteed portion of the housing loan. The amount outstanding in excess of the guaranteed portion should be provided for as per the extant guidelines on provisioning for non-performing advances.
Yours faithfully,
(A.K. Bera)
Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/370 · issued 14 Nov 2013. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8572&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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