Banks Told to Give 1% Interest sop for Home Loans up to R15 lakh

The Reserve Bank of India (RBI) on Tuesday asked banks to provide 1% interest subsidy for home loans up to R15 lakh.

The interest subvention scheme has been liberalised with effect from 2011-12 by extending it to housing loans up to R15 lakh where the cost of the house does not exceed R25 lakh, RBI said in a notification. The scheme has since been extended by government and will remain in force up to March 31, 2013, it said. A budgetary provision of R400 crore has been made under the scheme for the year 2012-13 by the government, it said.

The Union Cabinet chaired by Prime Minister Manmohan Singh approved the scheme in July.

The limit of subsidy for an individual borrower would be R14,912 for a loan of R15 lakh, and R9,925 for a loan of R10 lakh. The extended scheme will benefit all housing loans availed in the current financial year.

The National Housing Bank is the sole nodal agency for implementation of the scheme for banks, regional rural banks and housing finance companies.

Financial Express, New Delhi, 19-09-2012