Banks Approach RBI To Double Home Loan Amount Under Priority Sector
Lenders have reached out to the banking sector regulator, making a case for almost doubling the housing loan amount to be considered priority sector lending. If the Reserve Bank of India (RBI) approves this proposal, the housing sector is expected to get a push, considering that under existing regulations a housing loan of ?35 lakh in a metropolitan city is considered priority sector lending. Banks are mandated to meet priority sector targets. The limits set by the RBI on bank loans to the housing sector which were to be considered priority sector loans were issued in 2018, said a senior bank executive This does not reflect the existing real estate prices, which since then have increased. Banks expect the RBI to take this into consideration and revise the limits. Bankers have said that for metropolitan areas the limit should be revised to ?75 lakh and for non-metropolitan areas to ?45 lakh. As per existing guidelines, loans to individuals up to ?35 lakh in metropolitan centres (with population of at least a million) and up to ?25 lakh in other centres for the purchase or construction of a dwelling unit per family, provided the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed ?45 lakh and ?30 lakh, respectively.
Tags : lenders banking sector housing loan Reserve Bank of India housing metropolitan city regulations banks bankers