In a bid to promote housing for low income groups in major cities, the Reserve Bank of India has doubled the limit for home loans to 10 lakh rupees for consideration under priority sector lending.

In a notification issued yesterday, the RBI said that it has been decided to increase the limit from 5 lakh rupees to 10 lakh rupees for the bank loans extended to non-governmental agencies, approved by the National Housing Bank (NHB) for their refinance, for on-lending for the purpose of construction or reconstruction of individual dwelling units or for slum clearance and rehabilitation of slum dwellers.

As per the existing norms, banks have to provide 40 per cent of the total credit to the prescribed priority sectors including housing for weaker section.

Loans of such nature fall under indirect finance to housing sector as the final disbursement is done through NHB approved non-governmental agencies.