RBI/2004-05/299
UBD. BPD (PCB).Cir.29/09.09.01/04-05
December 14, 2004
The Chief Executive Officers
All Primary (Urban) Co-operative banks
Dear Sir/Madam,
Priority Sector Lending: - Housing Loan -Enhancement
of Ceiling for UCBs
Please refer to para 1.8.1.1 of Annexure I to
our Master Circular UBD.BPD.
(PCB) MC.No.1 /09.09.01/2004-05 dated July 2, 2004 on Priority Sector lending
in terms of which direct housing loans to individuals by banks up to Rs.10 lakh
for construction of houses in urban and metropolitan areas are eligible for
inclusion under priority sector. Further, in terms of para 4.1.1(ii) of our
Master Circular UBD.BPD.PCB.MC.No.7
/09.22.01/2004-05 dated August 16, 2004 on Finance for Housing Schemes,
banks have been permitted to extend direct housing loans up to Rs.10 lakh in
the rural and semi urban areas as well and treat the same as part of priority
sector advances.
2. In this connection
please refer to para No. 83 of the Mid Term Review of Annual Policy Statement
for the year 2004-05 dated October 26, 2004 (Copy of the paragraph enclosed).
In order to further improve flow of credit to the housing sector, it has been
decided that banks with the approval of their Boards, may extend direct finance
to housing sector up to Rs.15 lakh, irrespective of location, as part of their
priority sector lending.
3. In view of
the above, banks are now permitted to grant housing loans up to a maximum of
Rs 15.00 lakh per beneficiary of a dwelling unit as against the existing limit
of Rs 10.00 lakh contained in paragraph para 4.1.1(ii) of the Master
Circular UBD.No.BPD.PCB.MC.7/09.22.01/2004-05 dated August 16, 2004 on Finance
for Housing Schemes and treat the same as part of priority sector advances.
The other terms and conditions contained in paragraph 4 of the Master Circular
dated August 16, 2004 remain unchanged.
4. We shall be
glad if you please issue necessary instructions to your controlling offices/branches
in the matter for appropriate action.
5. Please acknowledge receipt
to the concerned Regional Office of RBI.
Yours faithfully,
(N.S.Vishwanathan)
Chief General Manager
Housing Loan: Enhancement of Ceiling
83: At present bank’s direct finance for housing
up to Rs 10.00 lakh in rural and semi urban areas is treated as priority sector
lending. In order to further improve flow of credit to the housing sector, it
is proposed that:
- Banks, with the approval of their Boards, may extend direct
finance to housing sector up to Rs.15 lakh, irrespective of location, as part
of their priority sector lending.
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