Saturday, April 28, 2012

Economically Weaker Sections : RBI Rise Home Loan Limit to Rs. 10 lakh


The RBI (Reserve Bank of India) on recently  doubled the limit for housing  loans to Rs. 10 lakh from Rs. 5 lakh for consideration under priority sector lending.

Increase  Limit..!
RBI said in a notification, “It has been decided to increase the limit from Rs. 5 lakh to Rs. 10 lakh for the bank home loans extended to non-governmental agencies, approved by  National Housing Bank (NHB) for their refinance, for on lending for the purpose of construction or reconstruction of individual dwelling units (Houses/flats) or for slum clearance and rehabilitation of slum dwellers,"

As per the existing norms, banks have to provide 40% of the total credit to the prescribed priority sectors including housing for economically 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.

Finance minister Mr.  Pranab Mukherjee in his Budget for 2012-13 proposed to enhance the limit of indirect finance under priority sector lending from Rs. 5 lakh to Rs. 10 lakh for construction or reconstruction of house for the weaker section.

In July last year (2011), RBI has said assistance given to a non-governmental agency approved by the NHB for the purpose of refinance for construction or reconstruction of dwelling units (Houses/flats) or for slum clearance and rehabilitation of slum dwellers, subject to a ceiling of loan component of Rs. 5 lakh per house.

Helping hand FM in his budget speech had proposed to enhance the limit of indirect finance under priority sector lending Banks have to provide 40% credit to the priority sectors including housing for weaker sections.  Loans of such nature is done through NHB approved nongovernmental agencies.
It is a bit to promote housing for low income groups in major cities.

Src: PTI

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