What changed
RBI, based on advice from the Delhi High Court Monitoring Committee, clarified that the earlier circular's directions on housing loans do not apply to farmhouses constructed on agricultural land outside Grampanchayat and Municipal Council limits. In such cases, local rules will prevail instead of the court-ordered norms.
What it means for you
For RRBs, this means you do not need to apply the Delhi High Court's housing loan conditions (like plan sanctions or completion certificates) to farmhouses on agricultural land in rural areas. You must follow local regulations for these loans, reducing compliance burden. However, ensure your loan policies clearly distinguish between urban/rural housing and farmhouse loans to avoid misapplication.
What you must do
- Update internal housing loan policies to exclude farmhouses on agricultural land from Delhi HC order requirements.
- Train loan officers to identify cases where local rules apply instead of the court directions.
- Place this circular before your bank's board for formal acknowledgment and action.
- Acknowledge receipt of this circular to your respective RBI Regional Office.
Who it affects
Regional Rural Banks (RRBs), RRB loan officers handling housing and farmhouse loans, RRB compliance and policy teams
Does this circular apply to all housing loans by RRBs?
No, it only clarifies that the Delhi High Court directions do not apply to farmhouses on agricultural land outside Grampanchayat/Municipal limits. For other housing loans, the earlier circular remains in effect.
What should we do if a borrower seeks a loan for a farmhouse on agricultural land?
You should follow local rules and regulations, not the Delhi High Court order. Ensure you verify the land's location and authority jurisdiction before sanctioning.