Housing loans of up to Rs. 35 lakh, for dwellings costing less than Rs. 45 lakh, will be treated as priority sector lending (PSL) to give a fillip to the low-cost segment, the Reserve Bank said today. 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 filip 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.

There is a condition however that the overall cost of the dwelling unit in the metropolitan centre (with population of ten lakh and above) and at other centres should not exceed Rs. 45 lakh and Rs. 30 lakh, respectively, for being classified as priority sector.

Currently, loans to individuals for 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 dwelling unit does not exceed Rs. 35 lakh and Rs. 25 lakh respectively.

An announcement in this regard was made in the 'Statement on Developmental and Regulatory Policies' released along with the Second Bi-Monthly Monetary Policy on June 6.

The RBI notification further said that 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) stands revised to Rs. 3 lakh per annum and Rs. 6 lakh per annum, respectively. #casansaar (Source - PTI, RBI, NDTV)