To boost demand for low- cost housing, the Reserve Bank of India (RBI) on Thursday reduced the risk weight for individual housing loans of up to Rs.75 lakh. The minimum risk weight for individual housing loans has been reduced from 50 per cent to 35 per cent. The risk weight for commercial real estate has been left unchanged at 100 per cent. For loans of up to Rs.30 lakh, the central bank increased the loan- to- value ( LTV) ratio to 90. LTV is the highest loan amount a bank can disburse, as a proportion of the property price. Now, banks will have to allocate less capital if risk weights are lower. Most banks have a sizeable portfolio of loans of up to Rs.75 lakh. As capital costs will come down due to lower risk weight, the move is expected to translate into lending rate cuts by banks. “This will be a boost for the low- ticket housing segment (up to Rs.30 lakh) … increasing the loan- to- value will encourage builders to focus on this segment. With the interest rates coming d