Can RRB Give Housing Loan?

Having worked in a Regional Rural Bank for many years I know that RRBs have undergone substantial structural and operational changes over the past ten years, including, but not limited to, two-phased amalgamations- the deployment of the CBS platform, and recapitalization. It has been agreed to update the priority sector criteria for RRBs in light of the rising importance of these institutions in advancing the financial inclusion strategy. But many people still have the basic question that can RRB give housing loan or not. I will help you with this query.

Do RRB give housing loan?

The Refinance Scheme of RRB is a programme that offers collateral-free loans to people with disabilities (PwDs). The Credit Guarantee Scheme (CGS) of the Government of India includes the Refinance Scheme. The major goal of the Refinance Scheme for Regional Rural Banks (RRBs) is to provide the ability for Persons with Disabilities (PwDs) to obtain a loan with no collateral for the purpose of furthering their education or starting their own business. Regional Rural Banks (RRBs), Public Sector Banks (PSBs), and other organisations that qualify under the Credit Guarantee Scheme (CGS) of the Government of India are the sources of the loans. The National Handicapped Finance and Development Corporation (NHFDC) interest rate is used for the loans.

So, if you’re wondering will RRB’s provide home loans, then your answer is yes they will. Loans of up to 20 lakh to individuals for the purchase or building of a family's primary residence, provided that the total cost of the residence does not exceed 25 lakh. Loans for housing made to bank employees themselves will not be included.

(ii) Up to Rs. 2 lakh in loans for family dwelling unit repairs.

(iii) Bank loans to any government agency up to a maximum of 10 lakh per dwelling unit for the construction of homes or for the removal of shanties and the rehabilitation of slum residents.

(iv) Bank loans approved for housing projects with the sole intent of building homes for low-income and economically disadvantaged groups, with a maximum cost of Rs. 10 lakh per dwelling unit. The household income restriction of Rs. 2 lakh per annum, irrespective of location, is imposed for the purpose of recognizing the economically weaker sections and low-income groups.

Common guidelines for home loans

The following general rules should be followed by RRBs for all categories of advances under the priority sector.

1. Rate of interest

The interest rate on bank loans will be in accordance with the guidelines periodically provided by our Department of Banking Regulation.

1. Service charges

On loans to the priority sector up to 25,000, there shouldn't be any loan-related or ad hoc service fees or inspection fees. When lending to SHGs or JLGs, the loan limit will only apply to each individual member and not to the group as a whole.

1. Receipt, Sanction/Rejection/Disbursement Register

The bank should keep a register or electronic record in which the date of receipt, approval or rejection, disbursement, and the reasons for each are noted. All inspection agencies should have access to the register or electronic record.

1. Issue of Acknowledgement of Loan Applications

For loan applications submitted under priority sector loans, banks must acknowledge receipt. Bank Boards should include a deadline for the bank to notify applicants in writing of its decision.

Now you know can RRB give housing loan or not.