Move to bring RRBs and SFBs on a level with SCBs
MUMBAI: The Reserve Bank of India (RBI) has raised the eligibility ceiling of housing loans under priority sector lending by Regional Rural Banks (RRBs) and Small Finance Banks (SFBs) in a move to bring these financial institutions at a level playing field with other Scheduled Commercial Banks (SCBs).
Accordingly, in respect of RRBs and SFBs, housing loans to individuals up to Rs35 lakh in metropolitan centres (with population of ten lakh 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.
As per the earlier criteria, 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 lending.
Further, the existing family income limit of Rs2 lakh per annum, prescribed 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, in alignment with the income criteria specified under the Pradhan Mantri Awas Yojana.
“Accordingly, the RRBs/SFBs are allowed to reckon their outstanding portfolio of housing loans meeting the revised criteria for classification under priority sector lending,” the RBI circular issued on Monday added.