Lendings-7 , Banking Fundamentals to Know for Students.

Blog on Banking Technology for Common Customer -- Click Here

1. Housing

(i) Loans to individuals up to 28 lakh in metropolitan centres (with a population of ten lakh and above) and loans up to 20 lakh in other centres for purchase/construction of a dwelling unit per family provided the overall cost of the dwelling unit in the metropolitan centre and at other centres should not exceed 35 lakh and 25 lakh respectively. The housing loans to banks’ own employees will be excluded. As housing loans which are backed by long term bonds are exempted from ANBC, banks should either include such housing loans to individuals up to 28 lakh in metropolitan centres and ₹ 20 lakh in other centres under priority sector or take benefit of exemption from ANBC, but not both.

(ii) Loans for repairs to damaged dwelling units of families up to 5 lakh in metropolitan centres and up to 2 lakh in other centres.

(iii) Bank loans to any governmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum dwellers subject to a ceiling of 10 lakh per dwelling unit.

(iv) The loans sanctioned by banks for housing projects exclusively for the purpose of construction of houses for economically weaker sections and low-income groups, the total cost of which does not exceed 10 lakh per dwelling unit. For the purpose of identifying the economically weaker sections ₹ and low-income groups, the family income limit of 2 lakh per annum, irrespective of the location, is prescribed.

(v) Bank loans to Housing Finance Companies (HFCs), approved by NHB for their refinance, for on-lending for the purpose of purchase/construction/reconstruction of individual dwelling units or for slum clearance and rehabilitation of slum dwellers, subject to an aggregate loan limit of 10 lakh per borrower. The eligibility under priority sector loans to HFCs is restricted to five per cent of the individual bank’s total priority sector lending, on an on-going basis. The maturity of bank loans should be co-terminus with the average maturity of loans extended by HFCs.  Banks should maintain necessary borrower-wise details of the underlying portfolio.

(vi) Outstanding deposits with NHB on account of priority sector shortfall.

2. Social infrastructure Bank loans up to a limit of 5 crores per borrower for building social infrastructure for activities  namely schools, health care facilities, drinking water facilities and sanitation facilities in Tier II to Tier VI centres.

3. Renewable Energy Bank loans up to a limit of 15 crores to borrowers for purposes like solar-based power generators, biomass-based power generators, windmills, micro-hydel plants and for non-conventional energy based public utilities viz. street lighting systems, and remote village electrification. For individual households, the loan limit will be 10 lakh per borrower.  

4. Others

4.1.  Loans not exceeding 50,000/- per borrower provided directly by banks to individuals  and their  SHG/JLG, provided the individual borrower’s household annual income in rural areas does not exceed 100,000/- and for non-rural areas it does not exceed 1,60,000/-.

4.2. Loans to distressed persons [other than farmers already included under III (1.1) A (v)] not exceeding 100,000/- per borrower to prepay their debt to non-institutional lenders.  

4.3. Overdrafts extended by banks up to 5,000/- under Pradhan Mantri Jan-DhanYojana (PMJDY) accounts provided the borrowers household annual income does not exceed 100,000/- for rural areas and 1,60,000/- for non-rural areas.

4.4. Loans sanctioned to State Sponsored Organisations for Scheduled Castes/ Scheduled Tribes for the specific purpose of purchase and supply of inputs and/or the marketing of the outputs of the beneficiaries of these organisations.