RBI has instructed all the banks to introduce a system to let home loan borrowers can enjoy the benefit of government’s 1% interest subsidy plan on home loans. This plan is for those who borrow sums up to Rs 20 lakh for purchasing the home.
A directive from RBI said, “Banks are advised to put in place a suitable mechanism to ensure that the eligible borrowers avail of the benefit of interest subvention for one housing unit only”.
Finance minister, Pranab Mukherjee had declared during Budget 2009-10 that interest subsidy of 1% on sums up to Rs 10 lakh for 1 year would be offered to home loan borrowers who are availing of loans up to Rs 20 lakh.
Initially this scheme was supposed to be offered till 30 September, 2010, but now has been extended to 31 March 2011.