Reserve bank of India


June 19, 2018

The Chairman/ Managing Director & CEOs
All Scheduled Commercial Banks
(Excluding Regional Rural Banks and Small Finance Banks)

Dear Sir/ Madam,

Priority Sector Lending – Targets and Classification

Please refer to Para 6 of the Statement on Developmental and Regulatory Policies of the Second Bi-Monthly Monetary Policy Statement 2018-19 dated June 06, 2018 and Para 10.1 of Master Direction on Priority Sector Lending – Targets and Classification dated July 7, 2016 (updated as on April 16, 2018), prescribing eligibility criteria of housing loans for classification under priority sector.

2. In terms of the above Master Direction, loans to individuals up to Rs. 28 lakh in metropolitan centres (with population of ten lakh and above) and Rs. 20 lakh in other centres, are eligible to be classified under priority sector, provided that the cost of dwelling unit does not exceed Rs. 35 lakh and Rs. 25 lakh, respectively.

3. With a view to bringing convergence of the Priority Sector Lending 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 (with population of ten lakh and above), and Rs. 25 lakh in other centres, provided the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed Rs. 45 lakh and Rs. 30 lakh, respectively.

4. Furthermore, the existing family income limit of Rs. 2 lakh per annum, prescribed under Para 10.4 of the above Master Direction, for loans to housing projects exclusively for the purpose of construction of houses for Economically Weaker Sections (EWS) and Low Income Groups (LIG), is revised to Rs. 3 lakh per annum for EWS and Rs. 6 lakh per annum for LIG, in alignment with the income criteria specified under the Pradhan Mantri Awas Yojana.

5. All other terms and conditions specified under the Master Direction shall remain unchanged. Master Direction ibid, is being updated simultaneously to reflect the above changes.

6. The revised guidelines shall come into effect from the date of the Circular.

Yours faithfully,

(Gautam Prasad Borah)
Chief General Manager-in-Charge

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