What changed
The ceiling for direct housing loans eligible under priority sector lending was increased from Rs 10 lakh to Rs 15 lakh per beneficiary. This applies to all locations—urban, metropolitan, rural, and semi-urban—removing the earlier location-based distinction.
What it means for you
UCBs can now offer larger housing loans under priority sector, boosting credit flow to housing. The higher limit gives banks more flexibility to serve homebuyers while meeting priority sector targets. Other terms from the August 2004 Master Circular remain unchanged.
What you must do
- Obtain board approval to adopt the enhanced Rs 15 lakh ceiling for priority sector housing loans.
- Update internal lending policies and priority sector reporting systems to reflect the new limit.
- Communicate the revised ceiling to all controlling offices and branches for implementation.
- Ensure compliance with unchanged terms from the August 16, 2004 Master Circular on housing finance.
Who it affects
Primary Urban Co-operative Banks (UCBs), Borrowers seeking housing loans under priority sector, RBI regional offices monitoring priority sector compliance
Does the Rs 15 lakh limit apply to all locations?
Yes, the enhanced ceiling applies irrespective of location—urban, metropolitan, rural, and semi-urban areas.
Do we need board approval to use the new limit?
Yes, banks must obtain board approval before extending housing loans up to Rs 15 lakh as priority sector advances.
Are other conditions from the earlier Master Circular changed?
No, only the loan ceiling is revised. All other terms and conditions from the August 16, 2004 Master Circular remain unchanged.