RBI directs banks to raise cap on home loans under priority sector lending


The Reserve Bank of India has directed the banks to increase the eligibility cap on housing loan for Regional Rural Banks (RRBs) and Small Finance Banks (SFBs) to Rs 35 lakh in metropolitan centres (with a population of ten lakh and above) and Rs 25 lakh in other centres under priority sector lending (PSL) .


As per the RBI directives from now onwards housing loans given by RRBs and SFBs to individuals up to Rs 35 lakh in metropolitan centres (with population of 10 lakh and above) and Rs 25 lakh in other centres, provided the overall cost of the dwelling unit in the metropolitan centres and at other centres does not exceed Rs 45 lakh and Rs 30 lakh, respectively, will be eligible for classification under priority sector lending.

Similarly, in the case of SFBs, loans up to Rs 28 lakh to individuals in metropolitan centres (with population of 10 lakh and above) and Rs 20 lakh in other centres, were eligible to be classified under priority sector lending, provided the cost of the dwelling unit does not exceed Rs 35 lakh and Rs 25 lakh, respectively.

The RBI said in its notification that the existing family income limit of Rs 2 lakh per annum, prescribed in the master direction for RRBs and the compendium for SFBs, eligible for loans to housing projects exclusively for the purpose of construction of houses for Economically Weaker Sections (EWS) and Low-Income Groups (LIG), has been revised to Rs 3 lakh per annum for EWS and Rs 6 lakh per annum for LIG, in alignment with the income criteria specified under the Pradhan Mantri Awas Yojana.

The Banking & Finance Post is an initiative of Elets Technomedia Pvt Ltd, existing since 2003.
Now, Elets' YouTube channel, a treasure of premier innovation-oriented knowledge-conferences and awards, is also active. To Subscribe Free, Click Here.

Get a chance to meet the Who's who of the NBFCs and Insurance industry. Join Us for Upcoming Events and explore business opportunities. Like us on Facebook, connect with us on LinkedIn and follow us on Twitter, Instagram & Pinterest.