RBI raises priority sector housing loan limits for RRBs, SFBs
07 May 2019
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The Reserve Bank of India (RBI) has decided to enhance the housing loan limits for Regional Rural Banks (RRBs) and Small Finance Banks (SFBs) for eligibility under priority sector lending, in a bid to give them a level-playing field with other Scheduled Commercial Banks.
Accordingly, in respect of RRBs and SFBs, housing loans to individuals up to Rs35 lakh in metropolitan centres (with population of one million and above) and Rs25 lakh in other centres, provided the overall cost of the dwelling unit in the metropolitan centres and at other centres does not exceed Rs45 lakh and Rs30 lakh, respectively, will be eligible for classification under Priority Sector Lending, RBI stated in a release.
So far, RRB loans to individuals up to Rs20 lakh for purchase/construction of a dwelling unit per family provided the overall cost of the dwelling unit does not exceed Rs25 lakh were eligible to be classified under priority sector. In terms of the compendium for SFBs, loans to individuals up to Rs28 lakh in metropolitan centres (with population of ten lakh and above) and Rs20 lakh in other centres, are eligible to be classified under priority sector, provided that the cost of dwelling unit does not exceed Rs35 lakh and Rs25 lakh, respectively.
In its notification, the RBI said the existing family income limit of Rs2 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 Rs3 lakh per annum for EWS and Rs6 lakh per annum for LIG.
Accordingly, the RRBs/SFBs are allowed to reckon their outstanding portfolio of housing loans meeting the revised criteria for classification under priority sector lending from the date of this circular, ie,6 May 2019.
