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Housing loans to be treated as priority sector lending

The Reserve Bank of India has brought the entire fundings of banks for housing sector under the umbrella of priority sector lending norms.

The RBI said that all the investment in bonds issued by National Housing Bank and Urban Development Corporation exclusively for financing of housing irrespective of the loan size per dwelling unit, would be reckoned for inclusion under priority sector advances. Earlier, the ceiling on loan size per dwelling unit was Rs 500,000.

Similarly, all indirect housing loans extended by banks to housing intermediary agencies against the loans sanctioned by them would be reckoned as part of housing finance allocation. The limit of direct housing loans of Rs 500,000 in all the areas has now been raised to Rs 1 million.

Explaining the important role being played by banks in providing credit to the housing sector, the RBI said that new measures were announced to increase the flow of bank finance to this sector.

UNI

ALSO SEE

RBI Governor Bimal Jalan's policy statement

RBI's Credit and Monetary Policy 1999-2000

RBI's Credit and Monetary Policy 1998-1999

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