Home loans upto Rs 35 lakh in metros will come under PSL, says RBI

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Image: https://precondo.ca/
Image: https://precondo.ca/

New Delhi : There is good news for those who are planning to buy home at the expense of bank loans. The Reserve Bank of India on Tuesday stated that housing loans of up to Rs 35 lakh, for homes costing less than Rs 45 lakh, will be treated as Priority Sector Lending. PSL loans are relatively cheaper than market interest rate.

“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 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 RBI said in a notification.

Conversely, the PSL benefits comes with a condition that the overall cost of the house unit in the metropolitan centre and at other centres should not exceed Rs 45 lakh and Rs 30 lakh, respectively, for being classified as priority sector.

At present, an individual’s loan up to Rs 28 lakh in metropolitan centres and Rs 20 lakh in other centres, can be classified under priority sector, provided that the cost of unit does not exceed Rs 35 lakh and Rs 25 lakh respectively.

The announcement regarding affordable house loans was made in the ‘Statement on Developmental and Regulatory Policies’ released along with the Second Bi-Monthly Monetary Policy on June 6.

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), according to the RBI notification, stands revised to Rs 3 lakh per annum and Rs 6 lakh per annum, respectively. Further, it has notified that the changes have been done in configuration with the income criteria specified under the Pradhan Mantri Awas Yojana.

(Image Courtesy: https://precondo.ca/)