Affordable housing loan to become cheaper due to this RBI decision

The RBI has raised the loan limits under PSL Rs 28 lakh to Rs 35 lakh in metropolitan centres and from Rs 20 lakh to Rs 25 lakh in other centres.

Affordable housing loan to become cheaper due to this RBI decision

New Delhi: Reserve Bank of India's (RBI) recent rate hike might result in banks raising their home loan rates, but the apex bank has given the borrowers something to cheer by increasing the priority sector lending (PSL) slabs, which is likely to make low-ticket sized loans cheaper.

The RBI has raised the loan limits under PSL Rs 28 lakh to Rs 35 lakh in metropolitan centres and from Rs 20 lakh to Rs 25 lakh in other centres.

The overall cost of the dwelling unit in the metropolitan centre (with population of ten lakh and above) and at other centres does not exceed Rs 45 lakh and Rs 30 lakh, respectively.

"Big boost to Housing for all. Increase in home loan limits under Priority sector lending to Rs 35 lakh in cities & Rs 25 lakh elsewhere to make such bank loans cheaper," Financial Services Secretary Rajiv Kumar said in a tweet after the statement of the RBI.

Loans given under PSL are less expansive than those provide by the banks in their ordinary course.
RBI further said a circular in this regard will be issued by the month end.

The RBI has red flagged small ticket housing loans and hinted of policy response to check the rising NPA in the segment.

In the statement, the RBI said after a careful analysis of the housing loans data, it has been observed that the level of NPAs for the ticket size of up to Rs 2 lakh has been high and is rising briskly.

RBI has also observed that the level bad loans for the ticket size of up to Rs 2 lakh has been high and is rising briskly, and it might tighten norms by increasing loan to value ratio and risk weight.

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