The RBI has increased the limits for affordable housing loans. Based on the (Priority Sector Lending) PSL eligibility, RBI has revised the housing loan limits from Rs.28 lakh to Rs.35 lakh in metropolitan cities and from Rs.20 lakh to Rs.25 lakh in other cities.
The revised limits under PSL and the government’s decision to use the abundant lands of sick Public Sector Undertakings (PSUs) for constructing such houses will boost the housing loan sector.
Loans offered under PSL are cheaper than the ones offered by banks under other schemes. To throw more light on the new reforms in the housing loan sector, RBI will be issuing a circular at the end of the month. To avail the revised housing loans, the overall cost of building a house in any of the metropolitan cities or other cities should not cross over Rs.45 lakh or Rs.30 lakh, respectively. In addition to the revised loan limit, homebuyers will be eligible to receive subsidy benefits of Rs.2.68 lakh from the Central Government of India.
President Ram Nath Kovind recently passed an ordinance, known as the Insolvency and Bankruptcy Code (IBC), 2018, that recognises homebuyers as financial creditors. According to the ordinance, the homebuyers have the right to question the builders in case they fail to meet their obligations on time. The ordinance would also permit the representation of homebuyers in the Committee of Creditors (CoC), making them a fundamental part of the decision-making processes.
In case the builders fail to keep their word, homemakers can invoke their right to file an application looking for ways to resolve the insolvency issue at hand, under Section 7 of the Insolvency and Bankruptcy Code. The government hopes that the hike in the housing loan limit will lead to a hike in the number of homebuyers and consequently invite more number of developers who are interested in catering to their needs.