The concept of reverse mortgage for homes for senior citizens introduced with much fanfare in the Union Budget 2007-08 by the UPA government has failed to catch up in the northern region.
Following the decision various banks launched the scheme but not many efforts were put in to popularise the scheme. Little wonder only seven cases have been registered from Punjab, Haryana and Chandigarh that availed the scheme through Punjab National Bank and few more have taken the advances under the scheme through State Bank of India here. Many other nationalised banks including Central Bank of India, Bank of Baroda, Allahabad Bank and Oriental Bank of Commerce have not even registered a single case.
The novel product ?reverse mortgage? under which a senior citizen who is the owner of a house can avail a monthly stream of income against the mortgage of his house, while remaining the owner and occupying the house throughout his lifetime, without repayment or servicing of the loan. The bank fixes the property price according to the market value and interest on the amount paid by the institution to the senior citizen.
Seeing the poor response in this region, Pawan Kumar Bansal, Union minister of state for finance, has now asked the banks to create the awareness on the scheme in the region. Pawan Kumar Bansal said, ?The concept of reverse mortgage is quite naive in India and the scheme will take time to catch up. Moreover senior citizens take the scheme as the last resort. But if the scheme is publicised at wider level then more and more people will come forward. However, identifying Chandigarh as a potential area, National Housing Bank in association with HelpAge India will open a counseling centre to prop up the scheme here?.
PNB that had launched the reverse mortgage loan called PNB Baghban in April last year and registered 113 cases across India sanctioning loan upto Rs 49 crore while this region Punjab, Haryana and Chandigarh disbursed loan amounting to Rs 6.56 crore to seven cases.
Commenting on the issue NC Jain, general manager, PNB said, ?The main objective of the loan is to generate income, supplement the pension or other income for day-to-day requirements. Under this senior citizens can avail loan along with interest upto Rs 1 crore against the house for at least 20 years. The interest rate would be 10% per annum. The margin of the bank would be 20%. For instance, if a person avails the loan upto Rs one lakh against the property then we will pay him the monthly installment of Rs 490. With the counseling centre being set up in Chandigarh things will certainly improve?.