The Banks were asked to implement 1% subsidy on home loans

By | March 22, 2011

A recent press report said that the Reserve bank of India has asked the banks to implement 1% interest subsidy on home loans up to Rs.15 lakh as per the budget announcement. The 1% charge will be implemented on home loan up to Rs. 15 lakh where the cost of the house does not go beyond Rs. 25 lakh.

In order to increase the demand for low cost housing loan a libralised scheme of 1%interest subvention on home loan up to Rs. 15 lakh where the cost of the house does not go beyond Rs. 25 lakh was announced by the Finance Minister, Mr. Pranab Mukerjee in the budget.

The RBI said that it has asked the banks to issue necessary instructions to their controlling offices and branch offices regarding the immediate implementation of the new interest rates on housing loan. The RBI has also said that the other funding schemes do not undergo any changes and the terms and condition of the housing subvention scheme also remains unchanged.

The implementation has come immediately after the withdrawal of SBI’s teaser rates following hike in its leading rate by 25 basic points, which will make loans across segments costlier.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

2 thoughts on “The Banks were asked to implement 1% subsidy on home loans

  1. Tapan

    Does this apply for new customers only or also existing customers. And the customers will get a direct deduction of 1% from current rate of interest ?

    Reply
  2. Rawat

    I have taken loan for property in noida extn. do I will also get the 1% subsidy for the region. because somebody saying that this scheme is for rural.

    Reply

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