Housing loans of up to Rs 35 lakhs, for dwellings costing less than Rs 45 lakhs, will be treated as priority sector lending (PSL), to give a fillip to the low-cost segment, the Reserve Bank said, on June 19, 2018. PSL loans are relatively cheaper than market interest rates.
“With a view to bringing convergence of the PSL guidelines for housing loans, with the affordable housing scheme and to give a fillip to low-cost housing for the Economically Weaker Sections (EWS) and Low Income Groups (LIG), the housing loan limits for eligibility under priority sector lending, will be revised to Rs 35 lakhs in metropolitan centres, and Rs 25 lakhs in other centres,” the RBI said in a notification. There is a condition, however, that the overall cost of the dwelling unit in metropolitan centres (with population of ten lakhs and above) and at other centres, should not exceed Rs 45 lakhs and Rs 30 lakhs, respectively, for being classified as priority sector. Currently, loans to individuals for up to Rs 28 lakhs in metropolitan centres and Rs 20 lakhs in other centres, can be classified under priority sector, provided that the cost of dwelling unit does not exceed Rs 35 lakhs and Rs 25 lakhs, respectively.
An announcement in this regard was made in the ‘Statement on Developmental and Regulatory Policies’ released along with the second bi-monthly monetary policy, on June 6, 2018. The RBI notification further said that the existing family income limit of Rs two lakhs per annum, for loans to housing projects for the EWS and LIG, stands revised to Rs three lakhs per annum and Rs six lakhs per annum, respectively. This, it added, has been done in alignment with the income criteria specified under the Pradhan Mantri Awas Yojana (PMAY).