Credit Linked Subsidy Scheme home loans: SBI disbursed funds to 10,000 borrowers

State Bank of India (SBI) has sanctioned around 10,000 home loans under the government’s Credit Linked Subsidy Scheme (CLSS) for home buyers from the economically weaker section (EWS), low income group (LIG) and middle income group (MIG) categories, said a senior executive at the bank. Vaijinath MG, chief general manager for real estate and housing business unit, told FE that demand for loans under the subsidy scheme was rising every month. “Last year, we saw demand particularly in the west, in states like Gujarat,” he said. “But this year, we see improvement in Kolkata. Gradually, demand is improving everywhere.”

The average ticket size of loans sanctioned under the scheme is Rs 20 lakh, he said. The ambit of the CLSS has been expanded with two modifications this year. On December 31, 2016, two new income segments were covered under it. These were households classified as MIG-I, whose annual incomes range between Rs 6 lakh and Rs 12 lakh, and MIG-II, with incomes between Rs 12 lakh and Rs 18 lakh per annum. MIG-I is eligible for an interest subsidy of 4% for loan amounts up to Rs 9 lakh, while MIG-II households will get an interest subsidy of 3% has for loan amounts of up to Rs 12 lakh.

In November, the carpet area ceilings for MIG households were raised, making more people eligible under CLSS.

Vaijinath added that with the Real Estate (Regulation and Development) Act (RERA), SBI has set up a dedicated team for loans to project developers, a category that banks have typically shunned because of the relatively high leverage in the segment. “Two years back, we moved into this segment. In the last one year, we have also acted on that and made an exclusive team for project funding for builders across the country, which is now active in in 26 cities,” he said, adding that SBI would lend only to projects which have all approvals in place. The credibility of the builder and the saleability of the project would be critical factors at the stage of credit assessment, he said.

State Bank of India