Home › Circulars › RBI/2010-11/521

Priority Sector Housing Loan Limit for UCBs Raised to Rs 25 Lakh

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2010-11/521 · issued 11 May 2011 · ~1 min read
Quick answerRBI has increased the housing loan limit under priority sector for Urban Co-operative Banks from Rs 20 lakh to Rs 25 lakh per family, effective for loans sanctioned on or after April 1, 2011.

What changed

The maximum housing loan amount eligible for priority sector classification by UCBs has been raised from Rs 20 lakh to Rs 25 lakh per family. This change applies to loans sanctioned on or after April 1, 2011, following the Union Budget 2011-12 announcement.

What it means for you

UCBs can now classify housing loans up to Rs 25 lakh (instead of Rs 20 lakh) as priority sector advances, expanding their lending scope. This allows banks to serve more borrowers under priority sector targets while supporting the government's housing push.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

Primary (Urban) Co-operative Banks, Borrowers seeking housing loans up to Rs 25 lakh, Priority sector lending compliance teams

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Does this circular apply to housing loans sanctioned before April 1, 2011?

No, the increased limit of Rs 25 lakh applies only to housing loans sanctioned on or after April 1, 2011. Loans sanctioned earlier remain under the old Rs 20 lakh limit.

Are loans to bank employees still excluded from priority sector classification?

Yes, loans granted by banks to their own employees are not eligible for priority sector classification, as per the existing guidelines.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1522: UBD.BPD.(PCB)CIR.No.46/09.09.001/2010-11 — "Limit of Housing Loans Under Priority Sector Advances - UCBs" dated May 11, 2011”
📜 Read the original circular — full text as issued by RBI
RBI/2010-11/521 UBD.BPD.(PCB)CIR No.46 /09.09.001/2010-11 May 11, 2011 The Chief Executive Officers All Primary (Urban) Co-operative Banks Madam / Dear Sir, Limit of Housing Loans Under Priority Sector Advances - UCBs Please refer to our Circular UBD.PCB.Cir.No.11/09.09.01/2007-08 dated August 30, 2007 forwarding therewith the guidelines for UCBs on lending to priority sector. In terms of item (vi) under 'Categories of Priority Sector' and also para 7.1 of section I of Annex of the above Circular, loans up to Rs.20 lakh irrespective of location, to individuals for purchase / construction of dwelling unit per family, excluding loans granted by banks to their own employees are eligible for classification under priority sector. 2. Pursuant to the announcements made by Union Finance Minister in paragraph 44 of the Budget Speech for the year 2011-12, it has been decided to increase the above limit from Rs.20 lakh to Rs.25 lakh. The change will be applicable to housing loans sanctioned on or after April 1, 2011. Yours faithfully (Uma Shankar) Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/521 · issued 11 May 2011. The plain-English explanation above is BankPulse’s own independent summary.
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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6403&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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