Centre to ask govt banks to promote housing loan scheme for urban poor

New Delhi: Unhappy with the public sector banks' lukewarm interest to approve loans under the interest subsidy scheme for urban poor, the Union housing and urban affairs ministry has asked the financial services department to direct these banks to aggressively promote the initiative.

Of the total beneficiaries under Credit Linked Subsidy Scheme ( CLSS), 75% were serviced by housing finance companies while public sector banks could reach out to only 12%. Out of the total 21 lakh affordable houses sanctioned under PM Awas Yojna (Urban) till now, 43,166 beneficiaries from economically weaker section and low income group have been disbursed interest subsidy of Rs 824 crore.

This came up during a review meeting chaired by housing and urban affairs secretary Durga Shanker Mishra on Thursday . Officials informed the secretary that under CLSS, which was made applicable to middle income sections from January 1 this year, 250 beneficiaries were given interest subsidy of over Rs 5 crore. “Another 10,000 applications are under process for disbursal of the interest subsidy ,“ a source said.

“Secretary suggested that RBI may be requested to earmark specific share of priority sector lending for affordable housing. As per the norms, PSBs have to ensure 40% of total lending to priority sector,“ an official said.

Following directions from the PM Narendra Modi to use new technologies for faster construction of affordable houses, the ministry also decided to hold a workshop on 3D printing construction technology in October with the participation of global companies.