DIFFERENTIAL RATE OF INTEREST (DRI) – 1972
Main objective: To assist poorest of the poor and to bring them above the poverty line
Applicable: All over India
Eligibility norms: Individuals whose family income not exceed Rs.18000/- p.a in rural areas and Rs. 24000/- p.a in urban & semi urban areas.
Purpose of loan: for productive activities, pursuing higher education by indigent studies, purchase of artificial limbs, hearing aids, wheel chair by physically handicapped.
Quantum of Loan: Maximum amount of Rs.15000 as term loan or working capital or both for productive purpose. For housing Rs.20,000/- (only to SC/ST)
Target: Min 40% to SC/ST and 2/3rd to be routed through rural & semi-urban branches.
Classification: Weaker section of advances under priority sectors.
Subsidy: Not available.
Rate of interest: 4% per annum – simple rate of interest.
Security: Hypothecation of assets created out of bank loan. No collateral security.
Repayment: maximum 5 years including grace period up to 2 years.
PRIME MINISTER EMPLOYMENT GENERATION PROGRAMME (PMEGP)
LAUNCHED ON: 10th October-2008 by merging PMRY and REGP
a) To generate employment opportunities in rural/urban India through new self-employment projects micro enterprises.
b) To bring together widely dispersed traditional artisans/rural & urban employed youth and give self-employment opportunities to the extent possible, at their place.
c) To provide continuous and sustainable employment to a large segment of traditional and prospective artisans and rural and urban unemployed youth in the country, so as to help arrest migration of rural youth to urban areas.
d) To increase the wage earning capacity of artisans leading to higher growth rate of rural and urban employment.
APPLICABLE: Both urban and rural areas throughout the country.
(a) Project cost above Rs.10 lakh for manufacturing and
(b) Project cost above Rs.5 lakh in Business & service
- National-KVIC, Mumbai.
- Rural – KVIC, state Boards & DIC
- Urban-state District Industries Centers (DIC) only. KVIC and DICs will involve NSIC, Udyami Mithras empanelled under Rajiv Gandhi Udyami Mitra Yojana (RGUMY), Panchayat Raj institutions and other NGOs of repute in identification of beneficiaries.
IDENTIFICATION OF BENEFICIARIES:
A Task Force will do the identification of beneficiaries at the district level consisting of representatives from KVIC/state KVIB and state DICs and Banks. The DM/DC/Collector will head the Task force.
TRAINING: Duration of EDP training reduced from 14 days to 3 days for mfg. projects up to 5 lac & service projects up to 3 lacs. Training be got completed by respective agency within 12 months of release of first installment.
Capital Expenditure as T/L. Working capital as cash credit. Composite Loan can also be considered.
MAXIMUM PROJECT COST:
|SUBSIDYGeneral category: urban – 15% , Rural – 25%Special category: urban-25%, Rural -35%Special category – SC/ST/OBC/Minorities/women, Ex-service men, physically handicapped, NER, Hill, Border area etc.||
MARGIN: General category – 10%, special category -5%. Margin to be deposited in full after EDP training with the Bank. Thereafter the Bank will release first installment of finance to the beneficiary.
INTEREST RATE: Normal rate of interest.
SECURITY: No collateral security for loans up to Rs.10 lakh
REPAYMENT: Between 3 to 7 years after an initial moratorium as prescribed by Bank.
SELF EMPLOYMENT SCHEME FOR REHABILITATION OF MANUAL SCAVENGERS (SRMS)
Main objective: Rehabilitating the scavengers and their dependents by March, 2009.
Eligibility Norms: Scavengers and their dependents (age 18 years and above), irrespective of their income, who are yet to be provided assistance for rehabilitation under any scheme of the Government of India/ State Governments.
Implementing Agencies: State Channelising Agencies (SCAs). The interest subsidy will be provided by National Safa Karamcharis Finance and Development Corporation (NSKFDC).
Quantum of loan: Project cost up to Rs.5 lacs Both, term loan (up to a maximum of Rs.5 lakh) and micro financing (up to maximum of Rs.25, 000) will be admissible under the scheme. Micro financing will also be done through SHGs and reputed NGOs.
PROJECT COST CAPITAL SUBSIDY
For projects costing up to Rs.25,000 - 50% of the project cost.
For projects costing more than Rs.25000 – 25% of the project cost, with a minimum of
Rs.12,500 & maximum of Rs.20,000.
Margin: No margin money/promoters contribution
Rate of Interest:
For projects up to Rs.25,000 – 5% per annum & 4% p.a for women beneficiaries
For projects above Rs.25,000 - 6% per anuum.
Repayment: Three years for projects up to Rs.25,000 and 5 years for projects above Rs. 25,000.
Gestation period is 6 months.
RAJIV RINN YOJANA
The Government of India has designed a Revised Interest Subsidy Scheme – named as Rajiv Rinn Yojana, as an instrument for addressing the housing needs of the EWS/LIG segments in urban areas. The scheme envisages the provision of a fixed interest subsidy of 5% on interest charged on the admissible loan amount to EWS and LIG segments to enable them to buy or construct a new house or for carrying out addition to the existing building.
The scheme is implemented with effect from 1st October , 2013
BROAD FEATURES OF THE SCHEME:
Purpose – The scheme will provide home loan with central government interest subsidy to EWS/LIG persons for acquisition/construction of house to such beneficiary, who does not own a house in his/her name or in the name of his/her spouse or any dependent child. Assistance would also be available to such of the EWS/LIG beneficiaries with less than 40 sq.m who intend to make additions to the living areas of the existing dwelling units by extending the same. Such beneficiaries who own land in any urban area but do not have any pucca house in their name or in the name of their spouse or any dependent child will also be covered under the scheme.
Eligibility – The economic parameter of EWS is defined as households having an average annual income up to Rs.1,00,000/- and the economic parameter of LIG is defined as households having an average annual income between Rs.1,00,001/- up to Rs.2,00,000/-. This will be subject to revision by the steering committee of the scheme from time to time.
Loan amount admissible – The scheme will provide an interest subsidy for a maximum amount of Rs.5,00,000/- for an EWS individual for a house at least of 21 sq.m They should be a provision for toilet where ever new construction of house is contemplated. Additional loans if needed would be at subsidized rates.
A maximum loan amount of Rs.8,00,000/- for LIG individual will be admissible. However, subsidy will be given for loan amount up to Rs.5,00,000/- only. Additional loan amount between Rs. 5 lakh and Rs.8 lakh, if taken would be at subsidized rates. A beneficiary can build or purchase a house with a minimum carpet area of 28 sq.mts as per his/her convenience.
TERMS FOR LOAN AND SUBSIDY REIMBURSEMSENT:
The subsidy will be 5% p.a on interest charged on the admissible loan amount for an LIG for construction or acquisition of a new house or for carrying out addition (of a room /kitchen/toilet/bathroom) to the existing building. The subsidy will be passed on as follows:
- The scheduled commercial Banks and housing finance companies (collectively called primary lending institutions or PLIs) will sign a MOU with any of the central nodal agencies (namely HUDCO and NHB) based on the agreed target number of beneficiaries that the bank or HFI would be servicing.
- The PLIs will sanction loans after due diligence and disbursement of loan would be as per the requirements of the borrower.
- The beneficiaries will be charged an interest net of the fixed subsidy of 5% (500 basis points) from the prevailing rate of interest of the PLIs. The PLIs will deduct the interest subsidy mount from the equated monthly installment (EMI) of the borrower and debit the net EMI.
- After sanctioning and disbursing the eligible loans, the PLI will claim reimbursement of subsidy from the CNAs (namely HUDCO and NHB) by submitting their claims in the prescribed format on a quarterly basis.
- The Government of India will release the subsidy amount to the CNAs immediately but not later than 2 months based on demand for sanction of subsidy received from the CNAs.
- The PLI will be required to ensure proper utilization of the funds and to submit utilization certificates, to their respective NCNA against the amount of the interest subsidy released to them.
- The PLIs will flag all the loans covered under the scheme in their books of accounts for the purpose of inspection by the specified authority.
- The central Nodal agencies (CNA) for the scheme will be the National Housing Bank (NHB) and Housing & urban Development corporation ltd. (HUDCO) The nodal agencies will not lend directly to the borrower but through banks or housing Finance companies (HFCs) who agree to be part of the scheme.
- The annual interest subsidy will be given by the Government to the lenders through its nodal agencies as brought out above. It will be passed on by the lender to the borrower in the form of reduced EMI.
- The agreed rate of interest would be fixed by the lending banks keeping in view the RBI guidelines issued from time to time.
- Beneficiary borrowers may choose fixed or floating rates (the consequences clearly explained to the borrowers by PLIs). An additional 1% p.a maximum will be permitted to be charged by Banks/HFCs, if fixed rate loans are extended which will be subject to reset after a minimum period of 5 years.
- Mortgage of dwelling unit may be accepted as primary security. However, there would be no collateral security/ third party guarantee for loans under RRY up to Rs.5 lakhs. No levy of prepayment charges would be permitted.
- The scheme will currently close on March 31, 2017, the last year of the 12th Five Year Plan period (2012-17). A decision about continuation in the present form or the amended form will be taken on the basis thereof. However, the loans extended in the last year will also have repayment period up to 15 years and suitable budgetary provisions will be made thereafter.
- The scheme will be monitored and concurrently evaluated independently at the end of the 12thplan i.e., in 2017.
- The borrowers under the scheme must belong to the EWS or LIG, and must have a plot of land for the construction or have identified a purchasable house as part of a group housing/apartment scheme or an existing house where addition to the living space is intended to be made. Borrowers would be free to approach and negotiate a loan under the scheme directly with the lender. However, it is envisaged that such borrowers would be few. Most borrowers and lenders would require the intercession of state Governments /Urban Local Bodies (ULBs) to identify borrowers with land, help them with preparation of papers and liaise for them with the lenders.
- Banks will provide loans to these beneficiaries on priority.
- In order to incentivize the designated staff of ULBs or NGOs a sum of Rs.100 per sanctioned application would be paid out of RRY funds.
- Further a onetime lump sum amount of Rs.500 per sanctioned application would be paid to the Banks towards their expenditure in handling such loans.
- The state shall link beneficiary identification in RRY to Aadhar (unique identification number) enrolment as a pre-condition wherever Aadhar cards have been issued.
- The voluntary NGOs may also be involved by State governments/ULBs in building awareness about the scheme among the urban poor. The applications duly filled through NGOs may also be accepted by the Banks and HFCs.
- In identifying beneficiaries, the ULB or the local agency identified by the state should as far as possible identify clusters in which land has been allotted and housing can be supported through this scheme (subject to beneficiaries being EWS/LIG segments) should be given to the following beneficiaries:
- Scheduled caste,
- Scheduled tribe,
- Minorities and
- Persons with disabilities.
- Applicants to form cooperative group housing societies or organizations like Employees welfare housing, Labour Housing , etc. should be given preference and wherever possible construction of houses by such cooperatives by way of 1+3 storied buildings should be promoted so that cost of land is shared among beneficiaries. However, this is not a mandatory requirement. Both individuals as well as Group Housing –borrowers are equally eligible under the scheme.
- If the housing co-operative societies approach the bank for availing the benefits under the scheme the liability for the loan can be joint and /or several.
- The borrowers selected by state/ ULBs /banks should as far as possible be in the ration of 50:50 respectively for EWS and LIG categories.
- The loan application can be made directly or through the ULB or the voluntary NGOs who will ensure that it is complete with the necessary certification.
- The documentation will be as per the procedural requirement of the lender. However, the lenders shall prescribe simpler forms (in local languages) and relaxed norms keeping in view the risk guarantee provided by credit Risk Guarantee Fund scheme to enable better access for the borrowers.
- The lenders will sanction the loan as per their own risk assessment and procedural requirements.
- In case of beneficiaries availing loan for construction of houses, release of loan will be linked to the pace of construction, which ideally is to be completed in 2 years. The lending Bank will monitor the progress of construction. This is equally applicable when the beneficiary proposes to buy the house from a private builder/ developer as a part of a group or apartment complex.
SELF EMPLOYMENT SCHEMES – WELFARE FINANCE CORPORATIONS NEW GUIDELINES.
- 6.00 lakh beneficiaries are to be covered amounting to a subsidy of around 1900 crores.
- The Government has issued G.O.Ms.No. 101, dated.31.12.2013 announcing the new policy guidelines for economic support schemes.
- SUSIDY POLICY: CATEGORY – SUBSIDY PATTERN
- SC,ST:60% of unit cost limited to a maximum of 1.00 lakh
- BC, Minority, Disabled welfare: 50% of unit cost limited to a maximum of 1.00 lakh
- BC Federations – 25000 per member society
- SERP/ MEPMA – Existing funding pattern
- ELIGIBILITY CRITERIA: AGE
- SC & ST – 21-45 years
- BC, Minority, Handicapped – 21-40 years
- Vulnerable groups – 21-45 years
- Selection of beneficiaries to be at the mandal level in view of the shortage of time – need for cooperation from all banks at the mandal level to participate in the selection process.
- A district level monitoring and implementation committee chaired by the District Collector and the lead development manager shall monitor the progress of the scheme.
- All application shall be registered through online beneficiary monitoring system (OBMS)
- Subsidy for the schemes will be released through the online system to the concerned banks after the loan accounts are opened as was done for earlier years.