According to the Ministry of Rural Development, difficulties in identifying borrowers’ eligibility for the Rural Housing Interest Subsidy Scheme (RHISS) and delays by public sector banks in signing an agreement with the National Housing Bank (NHB) have ended in an inadequate use of funds and poor response from the rural poorest people to the scheme.
In response to queries in Lok Sabha on Tuesday, Minister of Rural Development, Narendra Singh Tomar stated, “The total subsidy disbursed under this scheme until January 14, 2021 is ₹ 12.20 crore against the initial allocation of ₹ 48.54 crore for the scheme on July 31, 2019.”
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Minister Tomar also said “large public sector banks such as the State Bank of India, Punjab National Bank, Canara Bank, UCO Bank have not stepped into an Memorandum of Understanding (MoU) with NHB,” stating the cause of poor use of funds and poor response from the rural poorest people.
“While the subsidy requires to be extended to beneficiaries who are just not part of Pradhan Mantri Awas Yojana – Gramin’s permanent wait list, it’s really difficult to identify such beneficiaries,” it said.
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“In addition, the lack of availability of a credit guarantee affects the removal of the scheme by regional rural banks (RRBs) because they are hesitant to sanction the loans without a credit guarantee,” stated the Minister.
In order to achieve the ‘Housing for All’ target by 2022, in January 2017, the government had announced the Rural Housing Interest Subsidy Scheme (RHISS). Under it’s scheme, interest subsidies are issued at a rate of 3 percent on the principal amount, subject to a limit of ₹ 38,359.
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Interest subsidies are available for a cumulative loan sum of ₹ 2 lakh for a term of 20 years or for a full loan term, whichever one is lesser.
The National Housing Bank (NHB) is indeed the central nodal agency (CNA) responsible for channeling the financing institutions’ subsidies and controlling the implementation of the scheme.