Prime Minister Narendra Modi announced the plan in a speech in August on the country's Independence Day, but its details have not been previously revealed.
In this yet-to-be-announced scheme, annual interest subsidy between 3 to 6.5% will be provided on the loan amount up to Rs 9 lakh. Sources said home loans of less than Rs 50 lakh, with a tenure of 20 years, will be eligible for the scheme.
According to Reuters, banks are likely to roll out the scheme in a couple of months, ahead of key state elections later this year and general elections due in mid-2024.
The interest subsidy will be deposited upfront directly into the housing loan account of the beneficiaries,” said the Reuters report citing a government official. This scheme, proposed till year 2028, is being finalized and will require Cabinet approval. The official said that this scheme can benefit 25 lakh loan applicants from low income groups in small-urban areas but the quantum of subsidised credit will depend on demand for such homes.
PM Modi had said in his speech in August, "We are coming up with a new scheme in the coming years, which will benefit those families who live in cities, but are living in rented houses, or in slums. Are living, or are living in chawls and unauthorized colonies."
Lenders have not been provided any specific lending targets about this scheme but a meeting with government officials is likely soon, two bank officials told Reuters.
Earlier in 2017-2022, the Government had ran similar scheme under which 12.27 million homes were sanctioned.
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