Double home loan cap to Rs 10 lakh: RBI
Mumbai: In a bid to promote housing for low income groups in major cities, Reserve Bank on Friday directed urban cooperative banks to double the limit for home loans to Rs 10 lakh for consideration under priority sector lending.
As per the norms, assistance given to a non-governmental agency approved by the NHB (National Housing Bank) for refinance for construction or reconstruction of dwelling units or for slum clearance and rehabilitation of slum dwellers, subject to a ceiling of loan component of Rs 5 lakh is classified as priority sector lending.
At present, RBI has hiked the ceiling to Rs 10 lakh.
"Pursuant to the announcements made by the Union Finance Minister (in) the Budget Speech for the year 2012-13, it has been decided to increase the above limit from Rs 5 lakh to Rs 10 lakh," RBI said in a circular.
RBI has already issued similar instructions to commercial banks and also regional rural banks.
Banks have to provide 40 percent of the total credit to the prescribed priority sectors including housing for weaker section.
Loans of such nature fall under indirect finance to housing sector as the final disbursement is done through NHB approved non-governmental agencies.