Increase in Housing Loan Limit under Priority Sector to Rs.25 lakh

Reserve Bank of India has prescribed targets for commercial banks for lending to items included under the various categories of priority sector. Sub-targets were also specified for lending to agriculture and the weaker sections within the priority sector. Since then, there have been several changes in the scope of priority sector lending and the targets and sub-targets applicable to various bank groups.

Presently loans up to Rs.20 lakh irrespective of location, to individuals for purchase / construction of dwelling unit per family, excluding loans granted by banks to their own employees are eligible for classification under priority sector.

Pursuant to the announcement made by Union Finance Minister in the budget for the year 2011-12, RBI has notified on May 16, 2011. to increase the above limit from Rs.20 lakh to Rs.25 lakh.

The above change will be applicable to housing loans sanctioned on or after April 1, 2011.


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