The Reserve Bank of India (RBI) on Tuesday said non-resident Indians (NRIs) would not be eligible for incentives on interest for home loans up to Rs 10 lakh. Banks provide one per cent interest subsidy for home loans up to Rs 10 lakh.
“Housing loans extended to NRIs for the construction of farm houses, and to staff members of the banks are not eligible for subsidy under the scheme,” it said in a notification.
The central bank said the notification followed the recent clarifications issued by the government.
In the 2009-10 Budget, the government announced a one per cent interest subvention with respect to individual housing loans up to Rs 10 lakh, provided the cost of unit does not exceed Rs 20 lakh.
With an initial allocation of Rs 1,000 crore, the scheme was valid till September 30, 2010. During the last Budget, it was extended till March 31, 2011, with an additional provisioning of Rs 700 crore.