The Indian Overseas Bank has joined hands with NHB (National Housing Bank) for implementation of the rural housing subsidy scheme.
- A memorandum of Understanding has been signed between the two for the RHISS (Rural Housing Interest Subsidy Scheme). It is scheme of the central rural development ministry.
- The agreement was signed by R Subramaniakumar, MD and CEO of Indian Overseas Bank, and Sriram Kalyanaraman, MD and CEO of the National Housing Bank, along with senior executives of IOB and National Housing Bank.
- Under this scheme, the interest subsidy is 3 per cent for a loan amount of Rs 2 lakh with a repayment period of 20 years.
- The Indian Overseas Bank has become one of the first public sector banks to implement the scheme.
- The basic objective of the RHISS is to provide a subsidy for housing loans taken by those living in rural areas for construction and modifications of their dwelling units.
- This association between the IOB and the NHB will help IOB to extend the benefit of the RHISS scheme to its rural home loan customers through its 923 rural branches spread across India.
What is RHISS?
- The RHISS (Rural Housing Interest Subsidy Scheme) was officially launched on 24th January 2017 by our honourable Prime Minister Mr. Narendra Modi. The main reason behind the launch of this scheme was the lack of proper housing facilities in the rural areas. Therefore the Ministry of Rural Development launched the PMAY-G Home Loan Interest Subsidy Scheme- RHISS. This scheme will provide easy and cheap access for institutional loans at the subsidized interest rates for the construction or modification of their houses.
Key Features of this scheme
Empowering the rural candidates
- In order to empower the rural people to provide them an opportunity to get permanent houses, the central government has launched this scheme.
Attaining a credit from the financial institutions
- The rural people cannot arrange for the funds required for the construction or expansion of their houses. Therefore these people can take loans up to Rs 2 lakh from financial institutions.
Getting subsidy on the interest rates
- It is not possible for the rural people to pay high rates of interest. Therefore the central government has offered the interest subsidy of 3 per cent for a loan amount of Rs 2 lakh with a repayment period of 20 years.
Discount on NPV
- Not all individuals will require the full 2 lakhs for making the house. In such a situation, where the applicants have acquired a credit that is less 2 lakhs, they will be charged with an interest that will be calculated at 9% rate.
Tenure of loan repayment
- Any person who takes the loan under this scheme will have to repay the full credit amount by the end of 20 years.
Funded by the central government
- This scheme is the brain child of the Modi government and is therefore funded by the central government.
