What changed
The scheme, initially valid from October 1, 2009 to September 30, 2010, has been extended until March 31, 2011. The government allocated Rs 700 crore for 2010-11, down from the initial Rs 1,000 crore. Banks must now follow updated guidelines for claiming the subsidy.
What it means for you
Banks can offer 1% cheaper housing loans to eligible borrowers, reducing EMIs and potentially increasing loan demand. They must set up mechanisms to ensure each borrower gets the subvention only once. Monthly claims and quarterly auditor-certified utilization reports are mandatory for reimbursement from RBI.
What you must do
- Submit monthly claims in Forms I and I/I within a fortnight from the end of the respective month to the Chief General Manager, Rural Planning and Credit Department, Reserve Bank of India, Central Office, Shahid Bhagat Singh Road, Fort, Mumbai – 400 001.
- Submit quarterly utilization certificates in Forms II and II/I, signed by a statutory auditor, certifying claim accuracy.
- Implement internal controls to ensure each eligible borrower receives the subvention for only one housing unit.
- Track loan sanctions/disbursements up to March 31, 2011 to qualify for the subsidy.
Who it affects
All Scheduled Commercial Banks (excluding RRBs)
What is the maximum loan amount and property cost eligible for the 1% subvention?
The loan amount must not exceed Rs 10 lakh, and the cost of the housing unit should be no more than Rs 20 lakh.
How do banks claim the subsidy from RBI?
Banks must submit monthly claims using Forms I and I/I within 15 days after each month ends. They also need to provide quarterly utilization certificates signed by a statutory auditor.
Is the scheme applicable only for urban areas?
No, the scheme covers all regions of states and union territories, including both rural and urban areas.