Executive Summary:
This circular from the Reserve Bank of India revises the eligibility criteria for housing loans under priority sector lending for Regional Rural Banks (RRBs) and Small Finance Banks (SFBs). It increases the housing loan limits and revises the family income limits for housing projects for Economically Weaker Sections (EWS) and Low Income Groups (LIG) to align with Pradhan Mantri Awas Yojana. The revised criteria are effective from the date of the circular.
Key Points / Main Content:
Housing Loan Limits:
* For RRBs and SFBs, housing loans to individuals up to ₹35 lakh in metropolitan centers (population of ten lakh and above) and ₹25 lakh in other centers are eligible for classification under Priority Sector Lending (PSL).
* The overall cost of the dwelling unit should not exceed ₹45 lakh in metropolitan centers and ₹30 lakh in other centers.
Family Income Limits for EWS/LIG Housing Projects:
* The family income limit for loans to housing projects exclusively for EWS and LIG is revised.
* The new income limit is ₹3 lakh per annum for EWS and ₹6 lakh per annum for LIG.
Implementation:
* RRBs and SFBs can classify their outstanding portfolio of housing loans meeting the revised criteria under PSL from the date of the circular.
* All other terms and conditions specified under the existing Master Direction/Compendium remain unchanged.
Impact Analysis:
Regional Rural Banks (RRBs) and Small Finance Banks (SFBs)
* Impact: RRBs and SFBs can now classify a larger portion of their housing loan portfolio under priority sector lending, potentially helping them meet their PSL targets. The revised income criteria for EWS/LIG housing projects also expands their potential customer base.
* Action Required: RRBs and SFBs must implement the revised housing loan limits and income criteria for EWS/LIG housing projects and update their internal policies and procedures accordingly.
Individuals Seeking Housing Loans:
* Impact: Individuals in metropolitan and other centers can now avail larger housing loans and still be eligible under priority sector lending through RRBs and SFBs.
* Action Required: Individuals should check with RRBs and SFBs about the revised eligibility criteria to determine if they qualify for priority sector lending benefits.
Economically Weaker Sections (EWS) and Low Income Groups (LIG):
* Impact: More families from EWS and LIG may now qualify for housing loans under projects specifically targeted at them, due to the increased income limits.
* Action Required: Be aware of the changed criteria when seeking housing loans.
Key Entities Referenced
Reserve Bank of India: The central bank of India, the issuing authority of this notification.
Regional Rural Banks: Financial institutions in India that are addressed in this notification regarding Priority Sector Lending targets.
Small Finance Banks: Financial institutions in India that are addressed in this notification regarding Priority Sector Lending targets.
Priority Sector Lending: A type of lending where banks are required to allocate a certain percentage of their lending to specific sectors of the economy.
First BiMonthly Monetary Policy Statement 201920: A monetary policy statement issued by the Reserve Bank of India, referenced in the notification.
Master Direction Regional Rural Banks RRBs Priority Sector Lending Targets and Classification: A directive providing guidelines for Regional Rural Banks regarding Priority Sector Lending targets and classification.
Compendium for Small Finance Banks SFBs Priority Sector Lending Targets Classification: A compendium providing guidelines for Small Finance Banks regarding Priority Sector Lending targets and classification.
Pradhan Mantri Awas Yojana: An affordable housing scheme by the Government of India.
भारतीय ररज़र् वबकैं
RESERVE BANK OF INDIA
RBI/2018-19/179
FIDD.CO.Plan.BC.18 /04.09.01/2018-19 May 6, 2019
The Chairman/MD & CEO
All Regional Rural Banks/All Small Finance Banks
Dear Sir/ Madam,
Priority Sector Lending – Targets and Classification
Please refer to Para 10 of the Statement on Developmental and Regulatory Policies of
the First Bi-Monthly Monetary Policy Statement 2019-20 dated April 4, 2019 and Para 9
of Master Direction – Regional Rural Banks (RRBs) - Priority Sector Lending – Targets
and Classification dated July 7, 2016/Para 5 of the Compendium for Small Finance Banks
(SFBs) – Priority Sector Lending – Targets & Classification dated July 6, 2017,
prescribing eligibility criteria of housing loans for classification under priority sector.
2. In terms of the above Master Direction for RRBs, loans to individuals up to ₹ 20
lakh for purchase/construction of a dwelling unit per family provided the overall cost of the
dwelling unit does not exceed ₹ 25 lakh are eligible to be classified under priority sector.
In terms of the Compendium for SFBs, loans to individuals up to ₹ 28 lakh in metropolitan
centres (with population of ten lakh and above) and ₹ 20 lakh in other centres, are eligible
to be classified under priority sector, provided that the cost of dwelling unit does not
exceed ₹ 35 lakh and ₹ 25 lakh, respectively.
3. In order to bring the RRBs and SFBs at a level playing field with other Scheduled
Commercial Banks, it has now been decided to enhance the housing loan limits for
eligibility under priority sector lending. Accordingly, in respect of RRBs and SFBs,
housing loans to individuals up to ₹ 35 lakh in metropolitan centres (with population of ten
lakh and above) and ₹ 25 lakh in other centres, provided the overall cost of the dwelling
unit in the metropolitan centres and at other centres does not exceed ₹ 45 lakh and ₹ 30
lakh, respectively will be eligible for classification under Priority Sector Lending.
वित्तीय सावेिन औविविसेाविगे ,सनन्द्रीय ससेय सेालय स,10िीवंजिल,सेंरीय ससेय सेालय सगिऔ, हीदग तसाहं वे ,ापोस्टबॉक्ाां. 10014,वंब ई -400001
Financial Inclusion & Development Dept., Central Office,10th Floor, Central Office Building, Shahid Bhagat Singh Marg, P.B.No.10014, Mumbai-
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टनली Tel:022-22610586फैक्ाः91-22-22621011/22610943ई-वनल:cgmincfidd@rbi.org.in
ह दिं ी आसान ै, इसका प्रयोग बढ़ाइए।
“ चते ार्नी : ररज़र् व बकैं वर्ारा-डाक, एसएमएस या फोन कॉल के जररए ककसी की भी व् यक्तितगत जानकारी जैसे बकैं के ाात े का ् यौरा, पासर्ड व आहद न ी िं मागिं ी
जाती ै। य धन राने या देने का प्रस्त ार् भी न ी िं करता ै। ेसे प्रस्त ार्क का ककसी भी तरीके से जर्ाब मत दीक्तजए।"
Caution: RBI never sends mails, SMSs or makes calls asking for personal information like bank account details, passwords, etc. It never keeps or offers funds to
anyone. Please do not respond in any manner to such offers.Priority Sector Lending – Targets and Classification
4. Furthermore, the existing family income limit of ₹ 2 lakh per annum, prescribed
under Para 9.4 of the above Master Direction for RRBs/Para 5.4 of the Compendium for
SFBs, eligible for loans to housing projects exclusively for the purpose of construction of
houses for Economically Weaker Sections (EWS) and Low Income Groups (LIG), is
revised to ₹ 3 lakh per annum for EWS and ₹ 6 lakh per annum for LIG, in alignment with
the income criteria specified under the Pradhan Mantri Awas Yojana.
5. Accordingly, the RRBs/SFBs are allowed to reckon their outstanding portfolio of
housing loans meeting the revised criteria for classification under priority sector lending
from the date of this circular.
6. All other terms and conditions specified under the Master Direction/Compendium
shall remain unchanged.
Yours faithfully,
(Gautam Prasad Borah)
Chief General Manager-in-Charge
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