Priority Sector Lending: Housing Loan Limit Doubled to ₹10 Lakh
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2011-12/567 · issued 18 May 2012 · ~1 min read
Quick answerRBI has doubled the per-dwelling-unit loan ceiling for indirect housing finance via NHB-approved agencies from ₹5 lakh to ₹10 lakh, effective May 18, 2012. This expands priority sector classification eligibility for UCBs.
What changed
The loan component ceiling per dwelling unit for indirect finance to the housing sector through NHB-approved non-governmental agencies has been raised from ₹5 lakh to ₹10 lakh. This revision follows the Union Finance Minister's Budget 2012-13 announcement and applies to loans sanctioned from the date of this circular.
What it means for you
Urban Co-operative Banks can now classify a larger loan amount (up to ₹10 lakh per unit) as priority sector lending when financing housing through NHB-approved agencies. This allows UCBs to increase their priority sector portfolio without changing their lending strategy, potentially improving compliance with priority sector targets.
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
Update internal lending policies to reflect the new ₹10 lakh per dwelling unit ceiling for indirect housing finance.
Ensure all loans sanctioned from May 18, 2012, under this category are classified as priority sector only if they meet the revised limit.
Communicate the change to relevant branches and credit teams handling housing finance through NHB-approved agencies.
Review existing loan applications in the pipeline to apply the new limit where applicable.
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Does this circular apply to direct housing loans by UCBs?
No, this circular specifically addresses indirect finance to the housing sector through non-governmental agencies approved by NHB. Direct housing loans are covered under separate priority sector guidelines.
From when is the revised limit of ₹10 lakh applicable?
The revised limit is applicable to loans sanctioned from the date of this circular, i.e., May 18, 2012.
What was the previous limit for such loans?
The earlier ceiling was ₹5 lakh per dwelling unit, as per the guidelines issued in August 2007.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/567
UBD.BPD. (PCB) CIR No.33/09.09.001/2011-12
May 18, 2012
The Chief Executive Officers
All Primary (Urban) Co-operative Banks
Madam / Dear Sir,
Priority Sector Lending – Indirect Finance to Housing Sector
Please refer to our Circular UBD.PCB.Cir.No.11/09.09.01/2007-08 dated August 30, 2007 forwarding the guidelines for UCBs on lending to priority sector. In terms of para 7.4 of section I of Annex of the above Circular, assistance given to a non-governmental agency approved by the NHB for the purpose of refinance for construction / reconstruction of dwelling units or for slum clearance and rehabilitation of slum dwellers, subject to a ceiling of loan component of ` 5 lakh per dwelling unit, is eligible for classification under priority sector.
2. Pursuant to the announcements made by the Union Finance Minister in paragraph 65 of the Budget Speech for the year 2012-13, it has been decided to increase the above limit from ` 5 lakh to ` 10 lakh. The revised limit will be applicable to loans sanctioned from the date of this circular.
3. Please acknowledge receipt to the Regional Office concerned.
Yours faithfully
(A. Udgata)
Chief General Manager – in – Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/567 · issued 18 May 2012. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7221&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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