Mumbai: Reserve Bank Tuesday asked banks to provide one percent interest subsidy to home loans of up to Rs 15 lakh as announced by the government.
The interest subvention scheme has been liberalised with effect from 2011-12 by extending it to housing loans up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh, RBI said in a notification.
The scheme has since been extended by Government of India and will remain in force up to March 31, 2013, it said.
A Budgetary provision of Rs 400 crore has been made under the scheme for the year 2012-13 by Government of India, it said.
The Union Cabinet chaired by Prime Minister Manmohan Singh approved the scheme in July.
The limit of subsidy for an individual borrower would be Rs 14,912 for a loan of Rs 15 lakh, and Rs 9,925 for a loan of Rs 10 lakh. The extended scheme will benefit all housing loans availed in the current financial year.
The National Housing Bank is the sole nodal agency for implementation of the scheme for banks, Regional Rural Banks and housing finance companies.