What changed
The per-loan ceiling for bank loans extended to non-governmental agencies approved by NHB for on-lending to housing construction, slum clearance, or rehabilitation was increased from Rs 5 lakh to Rs 10 lakh. This change was prompted by the Union Budget 2012-13 announcement and applies to loans sanctioned from the circular date.
What it means for you
Banks can now lend larger amounts to NHB-approved intermediaries for housing projects under priority sector, potentially boosting affordable housing credit. This may increase eligible priority sector lending volumes for banks, helping meet targets while supporting government housing goals.
What you must do
- Update internal priority sector lending policies to reflect the new Rs 10 lakh limit for NHB-approved agency loans.
- Communicate the revised limit to credit and operations teams handling housing finance.
- Ensure loan sanctions from April 25, 2012 onward adhere to the increased ceiling.
- Review existing exposure to NHB-approved agencies for potential top-ups within the new limit.
Who it affects
All scheduled commercial banks (excluding RRBs), NHB-approved non-governmental housing agencies, Borrowers seeking housing loans through intermediary agencies
Does this circular change the priority sector lending classification for these loans?
No, the circular only revises the per-loan limit upward. The loans remain classified as indirect finance to housing sector under priority sector, as per the existing master circular.
Is the new limit applicable to loans sanctioned before April 25, 2012?
No, the revised limit applies only to bank loans sanctioned from the date of this circular, i.e., April 25, 2012.
Which agencies are eligible under this increased limit?
Only non-governmental agencies that are approved by the National Housing Bank (NHB) for refinance are eligible for loans under this facility.