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RBI extends priority sector lending guidelines for housing loans to RRBs and Small Finance Banks
ET Realty  |  April 5, 2019

Navneet Dubey ET Online

The Reserve Bank of India in its Statement on Development and Regulatory policies has decided to extend the eligibility of housing loan under priority sector lending to the Regional Rural Banks and Small Finance Banks.


As per the policy statement, RBI said, "The housing loan limits for eligibility under Priority Sector Lending were revised during June 2018 for Scheduled Commercial Banks (excluding Regional Rural Banks and Small Finance Banks). It has been decided to extend the same regulation to the Regional Rural Banks and Small Finance Banks. This is aimed to bring these banks at a level-playing field with other scheduled commercial banks."


Earlier in the notification dated 19 June 2018, RBI said that with a view to bringing convergence of the Priority Sector Lending guidelines for housing loans with the Affordable Housing Scheme, and to give a filip to low-cost housing for the economically weaker sections and low income groups, the housing loan limits for eligibility under priority sector lending is revised to Rs 35 lakh in metropolitan centres Rs 28 lakh earlier (with population of ten lakh and above), and to Rs 25 lakh from Rs 20 lakh earlier in other centres, provided the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed Rs 45 lakh and Rs 30 lakh, respectively.


Further, the existing limit for family income of Rs 2 lakh per annum for loans to housing projects for home construction economically weaker sections and low-income groups, is revised to Rs 3 lakh per annum and Rs 6 lakh per annum respectively in alignment with the income criteria specified under the Pradhan Mantri Awas Yojana, RBI said.


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


However, a detailed circular in this regard will be issued by RBI the end of April 2019.