What changed
This master circular replaces the July 1, 2015 version and consolidates all housing finance instructions issued up to February 17, 2022. It does not introduce new regulations but updates the reference framework for banks.
What it means for you
Banks must now refer to this single document for all housing finance guidelines, ensuring compliance with updated consolidated instructions. The circular reinforces existing rules on loan purposes, such as restrictions on speculative real estate use and requirements for sanctioned building plans.
What you must do
- Replace the 2015 master circular with this updated version in your internal policy documents.
- Ensure housing loan processes align with consolidated guidelines, including obtaining sanctioned building plans and borrower declarations for plot purchases.
- Review disclosure requirements and priority sector lending norms for housing finance as per this circular.
- Train credit and compliance teams on the updated consolidated framework.
Who it affects
All scheduled commercial banks (excluding RRBs), Housing finance departments, Credit risk and compliance teams, Priority sector lending units
Does this master circular introduce new housing loan rules?
No, it consolidates existing instructions issued up to February 17, 2022, without adding new regulations.
Which banks are covered under this circular?
All scheduled commercial banks except Regional Rural Banks (RRBs).
What key conditions must banks check before sanctioning a home loan for construction?
Banks must obtain a copy of the sanctioned building plan in the applicant's name and an affidavit-cum-undertaking that construction will follow the plan.