Union Bank of India signs MOU with National Housing Bank

BANKING/FINANCE

Union Bank of India signs MOU with National Housing Bank  

by Shrutee K/DNS

Mumbai 28^th September 2015, Union Bank of India, a leading Public Sector Bank today signed a Memorandum of Understanding (MoU) with National Housing Bank to launch “Pradhan Mantri Awas Yojana (PMAY)” as envisioned by the Government for Housing to All by 2022, the year when the Nation celebrates its 75^th Independence.

In line with objectives of the schemes, the role of Union Bank of India as a Prime Lending Institution (PLI) will facilitate promotion of Affordable Housing for weaker section through Credit Linked Subsidy Scheme (CLSS) in coordination with National Housing Bank, one of the Central Nodal Agency, which will channelize upfront subsidy under the scheme by signing an MOU between the Bank & NHB.

Under CLSS, Interest subsidy will be provided on home loans taken by eligible urban poor Economically Weaker section (EWS) and Low Income Group (LIG) seeking housing loans from PLIs would be eligible for upfront interest subsidy at the rate of 6.5 % for tenure of 15 years or during tenure of loan whichever is lower.

Interest subsidy will be credited upfront to the loan account of beneficiaries through lending institutions resulting in reduced effective housing loan and Equated Monthly Instalment (EMI). 

The Income level for EWS & LIG household have been fixed as Rs. 3.00 lakh & Rs. 6.00 lakhs per annum respectively and credit linked subsidy will be available only for loan amounts upto Rs 6 lakhs. Addi­tional loans beyond Rs. 6 lakhs, if any, will be at non-subsidized rate.

For identification as an EWS or LIG beneficiary under the scheme, an individual loan applicant will submit self-certificate/affidavit as proof of income.

On the occasion, Shri Arun Tiwari, Chairman & Managing Director, Union Bank informed that the Bank has identified RAM ( Retail  Agriculture & MSME ) as a thrust area in the current financial year.  Home Loans is the biggest contributor under Retail Lending showing y-o-y growth of 22% during FY 14-15.  The bank has announced waiver of processing charges in housing loans and vehicle loan scheme. The Bank being a part of fulfilling the mission of the Government prepare itself with all readiness to implement CLSS across the notified towns through network of its branches in close coordination with the NHB. 

The MOU was signed by Smt. Rekha P Nayak, General Manager, Union Bank of India, with Shri V. Sambamurthy, Assistant General Manager, National Housing Bank in the presence of Shri Arun Tiwari, Chairman & Managing Director, Union Bank of India, Shri Rakesh Sethi, Executive Director, Union Bank of India and Shri Sriram Kalyanaraman, MD & CEO, National Housing Bank.