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RBI Revises Limits On The Housing Loan Limits Under Priority Sector


The Reserve Bank of India (RBI) has revised its limits on the housing loan limits under priority sector. On loans up to Rs. 35 lakh and dwellings costing less than Rs. 45 lakh will not be treated as priority sector lending (PSL) as a boost to the low-cost segment, the Reserve Bank said on Tuesday.


Interest on home loans in the PSL are relatively cheaper than market rates.

Good News for Some Home Buyers

In its notification, RBI said, "With a view to bringing convergence of the PSL guidelines for housing loans with the Affordable Housing Scheme, and to give a filip to low-cost housing for the Economically Weaker Sections and Low-Income Groups, the housing loan limits for eligibility under priority sector lending will be revised to Rs. 35 lakh in metropolitan centres, and Rs. 25 lakh in other centres..."

The condition, however, is that the overall cost of the dwelling unit in the metropolitan centre (with a population of ten lakh and above) and at other centres should not exceed Rs. 45 lakh and Rs. 30 lakh, respectively, for being classified as priority sector.


At present, loans up to Rs. 28 lakh in metropolitan centres and Rs. 20 lakh in other centres are classified under priority sector where the cost of dwelling unit does not exceed Rs. 35 lakh and Rs. 25 lakh respectively.

The announcement about it was made in the 'Statement on Developmental and Regulatory Policies' that was released on June 6 along with the Second Bi-Monthly Monetary Policy.

The existing family income limit of Rs. 2 lakh per annum for loans to housing projects for Economically Weaker Sections (EWS) and Low Income Groups (LIG) is revised to Rs. 3 lakh per annum and Rs. 6 lakh per annum, respectively, the RBI notification further said. This decision has been in alignment with the income criteria specified under the Pradhan Mantri Awas Yojana.

Read more about: priority sector lending
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