Priority Sector Lending – Targets and Classification
Loans to individuals up to 20 lakh for purchase/construction of a dwelling unit per family provided the overall cost of the dwelling unit does not exceed 25 lakh are eligible to be classified under priority sector. In terms of the Compendium for SFBs, loans to individuals up to 28 lakh in metropolitan centres (with population of ten lakh and above) and 20 lakh in other centres, are eligible to be classified under priority sector, provided that the cost of dwelling unit does not exceed 35 lakh and 25 lakh, respectively.
In order to bring the RRBs(Regional Rural Banks) and SFBs ( Small finance Banks) at a level playing field with other Scheduled Commercial Banks, it has now been decided to enhance the housing loan limits for eligibility under priority sector lending. Accordingly, in respect of RRBs and SFBs, housing loans to individuals up to 35 lakh in metropolitan centres (with population of ten lakh and above) and 25 lakh in other centres, provided the overall cost of the dwelling unit in the metropolitan centres and at other centres does not exceed 45 lakh and 30 lakh, respectively will be eligible for classification under Priority Sector Lending.
The existing family income limit of 2 lakh per annum, prescribed under the Compendium for SFBs, eligible for loans to housing projects exclusively for the purpose of construction of houses for Economically Weaker Sections (EWS) and Low Income Groups (LIG), is revised to 3 lakh per annum for EWS and 6 lakh per annum for LIG, in alignment with the income criteria specified under the Pradhan Mantri Awas Yojana.
Accordingly, the RRBs/SFBs are allowed to reckon their outstanding portfolio of housing loans meeting the revised criteria for classification under priority sector lending from the date of this circular.
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