According to the recent reports, RBI has cleared the fact that NRIs are not eligible for subsidies on interest for home loans upto Rs.10 Lakhs. Usually, banks provide to borrowers a subsidy of 1% for home loans upto Rs.10 lakhs. But this decision is not going to benefit NRIs and staff working in banks.
This has been issued by the government followed by recent clarifications as said by the Central bank.
In the Budget of 2009-10, the government announced a scheme of 1% subsidy towards home loan amounts from minimum of Rs 10 lakh and a maximum of Rs 20 Lakh, which was valid upto September 30, 2010, with an initial allocation of Rs. 1000 crore. The scheme was extended till March 31, 2011 with an additional provision of Rs.700 crore during the last budget.
Later, RBI directed the banks that in case of upfront credit of subsidy, banks have to use their own funds till the reimbursement is done to them by the government. The RBI also mentioned that loans sanctioned before October 1, 2009 would not qualify for reimbursement.
“While calculating the interest subsidy, each disbursement may be treated as a separate loan and for each disbursement, subsidy claim may be made for twelve instalments,” RBI said.
With respect to all housing loans eligible for subsidy under the scheme, the central bank also asked all banks to submit their claims on a monthly basis to review the same.