Vide its circular no. RBI/ 2012-13/73 DBOD. No.DIR.BC.07/08.12.001/2012-13, dated July 2, 2012, has issued a consolidated master circular of rules/regulations and clarification on Housing Finance. According to the circular the banks could deploy their funds under the housing finance allocation in direct finance, indirect finance, investment in bonds of NHB/HUDCO, or combination thereof.
Direct Housing Finance refers to the finance provided to individuals or groups of individuals including co-operative societies. Banks have been given autonomy to evolve their own guidelines with the approval of their Boards on aspects such as security, margin, age of dwelling units, repayment schedule, etc. The circular lists the types of bank finance may be included under Direct Housing Finance.
Banks have been instructed to ensure that their indirect housing finance is channeled by way of term loans to housing finance institutions, housing boards, other public housing agencies, etc., primarily for augmenting the supply of serviced land and constructed units. The master circular lays down guidelines for lending to housing intermediary agencies.
RBI has instructed banks to refer to the Master Circular on Lending to Priority Sector issued by Rural Planning and Credit Department. The circular also provides that the finance provided by the banks would not be eligible for refinance from Reserve Bank. The master circular gives a list of construction activities eligible for bank credit as housing finance and a list of construction activities not eligible for bank credit
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