RBI Raised Home Loan Limits For Affordable Housing Segment By 25%

The condition is that the overall cost of the house does not exceed Rs 45 lakh in the metropolitan centres and Rs 30 lakh at other centres. The RBI added that a circular on the subject would be issued by the end of this month.

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RBI Raised Home Loan Limits For Affordable Housing Segment By 25%

The affordable housing segment has much to cheer about with the RBI raising the home loan limits for priority sector lending (PSL) by 25 per cent.

In order to bring greater convergence of the Priority Sector Lending guidelines for housing loans with the Affordable Housing Scheme, and to give a fillip to the low-cost housing for the Economically Weaker Sections (EWS) and Lower Income Groups (LIG), it has been decided to revise the home loan limits for PSL eligibility from existing Rs 28 lakh to Rs 35 lakh in metropolitan centres (with population of 10 lakh and above), and from existing Rs 20 lakh to Rs 25 lakh in other centres, the apex bank said in a statement.

Read Also: IL&FS To Partner With VBHC Value Homes For Affordable Housing Project

The condition is that the overall cost of the house does not exceed Rs 45 lakh in the metropolitan centres and Rs 30 lakh at other centres. The RBI added that a circular on the subject would be issued by the end of this month.

Significantly, the central bank has also red-flagged the rise in bad loans among small ticket housing loans and hinted at stepping in should the situation continue to worsen. According to the RBI, after a careful analysis of the housing loans data, it was observed that the level of non-performing assets (NPAs) for the ticket size of up to Rs 2 lakh “has been high, and is rising briskly”.

Read Also: Younger Generation Homebuyers Interested More In Affordability Than Size

There are almost 100 housing finance companies many focusing on low ticket size lending to the self-employed segment and their assets under management jumped 24 per cent in the last fiscal courtesy the massive opportunities in affordable housing and slower credit growth by banks. Alarmingly, the report added that some of these companies have posted gross NPAs of 4-5 per cent, an above-average increase in delinquencies.

Another development that has major implications for the affordable housing segment is the Union Cabinet’s decision to use the surplus land of sick PSUs for the construction of such dwelling units. The decision was taken at a meeting of the Union Cabinet chaired by Prime Minister in Delhi.

Read Also: Smart City Delhi Group Housing 2018 Launched With 33% Women Quota

Source Link- https://www.businesstoday.in/

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