New Delhi: Rajiv Rin Yojna, which seeks to provide interest subsidy upto 5 percent for affordable housing loan, is expected to get approval by the end of next month, a top government official said.
"We have already circulated the EFC note 6 weeks ago. So we are planning to take it to Expenditure Finance Committee (EFC) next month. We are quite hopeful that something we be done by the end of next month," Ministry of Housing & Urban Poverty Alleviation Secretary A K Misra said at the agreement signing between Credit Risk Guarantee Fund Trust and four financial institution including Oriental Bank of Commerce.
As per the proposed scheme, interest subsidy of 5 percent will be provided to housing loan of Rs 3 lakh for the Economically Weaker Section households and Rs 5 lakh for the Lower Income Group beneficiaries.
Both these loans would be granted with 5 percent interest subsidy.
This would not only provide necessary credit to acquire the house but also give the necessary impetus to the housing sector, he said.
"The idea is if a poor person who can access loan upto Rs 8 lakh will be covered under this particular programme. Once the scheme come in we hope that a lot of bank money will go for this," he added.
Meanwhile, National Housing Bank (NHB)'s operated Credit Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH) entered into agreement with four more lending institutions-- Oriental Bank of Commerce, Allahabad Bank, State Bank of Patiala and Housing and Urban Development Corporation (HUDCO).
With this, the total number of Institutions who have decided to join the Scheme has gone up to nine including the majors, SBI and HDFC.
These institutions will now be eligible to avail the Credit Guarantee Cover under Credit Risk Guarantee Scheme (CRGFS), for the housing loans given by them to the EWS/LIG borrowers.
Under the scheme, the Trust Fund will provide credit risk guarantee to the lending institutions against their housing loans upto Rs 5 lakh for new borrowers in the EWS/LIG categories of population in Urban Areas without requiring any collateral.
The extent of guarantee cover to be provided under the scheme is 90 percent of the amount in default in respect of loan amount upto Rs 2 lakh and 85 percent of the amount in default for housing loan above Rs 2 lakh to Rs 5 lakh.