Banking · RBI Lending Norms
Given below are two statements, one labeled as Assertion (A) and the other as Reason (R): Assertion (A): Commercial and primary cooperative banks must ensure that the Loan-to-Value (LTV) ratio for housing loans above 75 lakh is strictly maintained at 75 percent or below to comply with regulatory mandates. Reason (R): The Reserve Bank of India utilizes LTV ratios as a macro-prudential tool to check asset price bubbles in the real estate sector and to ensure borrowers have sufficient equity, reducing the default probability. Choose the most appropriate option in light of the statements above:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both Assertion and Reasoning are correct and Reasoning is the correct explanation.✓
- 2Both Assertion and Reasoning are correct but Reasoning is not the correct explanation.
- 3Assertion is correct but Reasoning is incorrect.
- 4Both Assertion and Reasoning are incorrect.
Correct answer
Both Assertion and Reasoning are correct and Reasoning is the correct explanation.
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