CAIIB Rural Banking Module C Unit 3 : Rural Housing And Education Loans

02/01/2024

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CAIIB Rural Banking Module C Unit 3 : Rural Housing And Education Loans (New Syllabus)

IIBF has released the New Syllabus Exam Pattern for CAIIB Exam 2023. Following the format of the current exam, CAIIB 2023 will have now four papers. The CAIIB Rural Banking includes an important topic called “ Rural Housing And Education Loans”. Every candidate who are appearing for the CAIIB Certification Examination 2023 must understand each unit included in the syllabus.

In this article, we are going to cover all the necessary details of CAIIB Rural Banking Module B Unit 3 : Rural Housing And Education Loans, Aspirants must go through this article to better understand the topic, Rural Housing And Education Loans and practice using our Online Mock Test Series to strengthen their knowledge of Rural Housing And Education Loans. Unit 3 : Rural Housing And Education Loans

Pradhan Mantri Awas Yojana (Grameen)

IAY was restructured w.e.f. 1st April 2016 and it was named as Pradhan Mantri Awas Yojana – Gramin (PMAY-G). PMAY-G aims to provide pucca houses by Y -2022, to all houseless persons and those living in ‘kutcha’ and dilapidated houses.
Under the scheme, minimum size has been increased to 25 Sq. mt. (from 20 Sq. mt.) with hygienic cooking place. The unit assistance has been increased from Rs. 70,000 to Rs. 1,20,000 in plains and from Rs. 75,000 to Rs. 1,30,000 in hilly states.
The cost of the unit is to be shared between Central and State Governments in the ratio of 60:40 in plain areas and 90:10 for north Eastern and Hilly states.
Houses sanctioned under PMAY-G are eligible to receive assistance of Rs. 12,000/- for construction of toilet from Swatch Bharat Mission, MGREGS or any other dedicated financing source of the Government.
The identification and selection of the beneficiaries shall be done by the community through the Gram Sabha, from the SECC 2011 list, based on the housing deficiency and other social deprivation parameters.
If the beneficiary so chooses, he/she will be facilitated to avail loan from financial institutions for an amount up to Rs. 70,000.
All payments through DBT to beneficiary’s Bank/Post office accounts registered in AwasSoft MIS.

Exclusions:

The scheme provides for exclusion of those living in pucca houses, those having motorized two/three/four- wheeler/fishing boat, those having mechanized three/four- wheeler agricultural equipment.
Kisan Credit Card holders with credit limit of Rs. 50,000 or above
Household with any member as a government employee, households with any member of the family earning more than Rs. 10,000 p.m.
Households with any member paying income tax/professional tax, those owning a refrigerator/ landline phone, those owning 2.5 acres or more of irrigated land with at least one irrigation equipment, those owning 5 acres or more of irrigated land for two or more crop seasons, and those owning 7.5 acres of land or more with at least one irrigation equipment.

Interest Subsidy to those not covered under the PMAY- Grameen

A new scheme for promotion of Rural Housing in the country has been approved by the union cabinet in 2017, whereby the Government would provide interest subsidy of 3 per cent. It will enable people in rural areas to construct new houses or make addition to their existing pucca houses in order to improve the dwelling units. The scheme is being implemented by the National Housing Bank (NHB).
Under the scheme, the beneficiary will be provided interest subsidy for the loan availed up to Rs. 2 lakhs. Government will provide interest subsidy of 3 per cent to NHB upfront which will, in turn, pass it to the Primary Lending Institutions (SCBs), NBFCs, etc.

Affordable Housing

“Affordable housing” is defined as a housing project that uses, at least 50 per cent of the floor space index (FSI), for dwelling units, with a carpet area of not more than 60 sq m.
Lending to affordable housing segment as also the housing loans to individuals up to Rs. 50 lakhs, for houses of values up to Rs. 65 lakhs located in the six metropolitan centres viz. Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad and Rs. 40 lakhs for houses of values up to Rs. 50 lakhs, in other centres, for purchase/ construction of dwelling unit per family, will be deemed as priority sector loans.

Classification of Housing Loan by Banks as Priority Sector

Loans to individuals up to Rs. 35 lakh in metropolitan centres and up to Rs. 25 lakh in other centres for purchase/construction of a dwelling unit per family provided the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed Rs. 45 lakh and Rs. 30 lakh respectively.
Loans up to Rs. 10 lakh in metropolitan centres and up to Rs. 6 lakh in other centres for repairs to damaged dwelling units.
Bank loans to any governmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum dwellers subject to dwelling units with carpet area of not more than 60 sq.m.
Bank loans for affordable housing projects using at least 50% of FAR/FSI for dwelling units \with carpet area of not more than 60 sq.m.
Bank loans to HFCs (approved by NHB for their refinance) for on-lending, up to Rs. 20 lakh for individual borrowers, for purchase/construction/ reconstruction of individual dwelling units or for slum clearance and rehabilitation of slum dwellers.

Support to Rural Housing and Rural Sanitation by NABARD

A comprehensive rural housing policy has been adopted by NABARD with the objective of meeting huge unmet needs of rural housing in the country. For various initiatives of Government for rural infrastructure development including PMAY-G, NABARD has been raising resources from the market for on lending to National Rural Infrastructure Development Agency (NRIDA), the nodal agency to meet the shortfall in the share of GOI in the project.
Government of India (Ministry of Jal Shakthi) has launched Swachh Bharat Mission- Gramin (SBM -G), with a view to achieving universal sanitation coverage, in rural areas. Under the SBM-G, NABARD has been extending loans to the National Centre for Drinking Water, Sanitation and Quality, towards part funding of Central share, towards construction of 3 crore household toilets.

Education

The objective of educational Loan Scheme is providing financial support from the banking system to meritorious students for pursuing higher education in India and abroad.

Skill Development and Entrepreneurship Loan Scheme (Skill Loan Scheme)

Government of India has launched the National Skill Development Mission and unveiled the new National Policy for Skill Development and Entrepreneurship 2015.
The objective of the scheme is to provide loan facility to individuals, who intend to take up the skill development courses.
Any individual, who has secured admission in a course, run by Industrial Training Institutes (ITIs), or in a college affiliated to recognized university, training partners affiliated to National Skill Development Corporation (NSDC), leading to a certificate/ diploma / degree issued by such organization as per National Skill Qualification Framework (NSQF,) shall be eligible for a Skilling Loan.
Maximum financial assistance shall be Rs. 1,50,000, to cover tuition fees, other reasonable expenditure found necessary for completion of the course,
Margin for loan shall not exceed 10% of the total course expenditure.
No collateral security shall be obtained. However, the banks have option to apply to the National Credit Guarantee Trust Company Ltd (NCGTC) for credit guarantee, against defaults and the NCGTC will provide such guarantee, at nominal guarantee fee, which shall not exceed 0.5% of the amount outstanding. Such credit guarantee cover will be for a maximum of 75% of the outstanding loan amount.
Repayment shall start after a moratorium period up to six months from the date of completion of course, if the course duration is up to one year. If the course duration is more than one year, moratorium period may extend 12 months from the date of completion of the course.
The loans shall have the tenure ranging between 3 to 7 years i.e., (a) for loans up to Rs. 50,000 – up to 3 years (b) Loans between Rs. 50,000 and Rs. 1 lakh: Up to 5 years and (c) Loans above Rs. 1 lakh: up to 7 years; No prepayment charges are to be recovered.

Other Initiatives of GOI

Pradhan Mantri Vidya Lakshmi Karyakram (PMVLK):

launched by GOI in the year 2015 aims at making the educational loan available to every student with ease, i.e., they should not face the barrier of lack of funds for pursuing education. To make this possible, online portal https://www. vidyalakshmi.co.in/ Students/ was launched.

The benefits of the scheme are as under:

It is a single window platform for the students seeking educational loan or scholarship.
Through this website, student can search for various educational loan and scholarship providers, make application and track the status online.
Loan application can be made for studying within India and abroad.
Student can apply for any type of course i.e., under-graduation, post-graduation, professional and vocational course.

Tax Benefits: As per Section 80E of the Income Tax Act, 1961, deductions are allowed on interest on Education Loan. Section 80 E covers education loan taken for Higher Studies (maximum period: 8 years).

Priority Sector: Loans to individuals for educational purposes including vocational courses up to Rs. 20 lakhs, irrespective of the sanctioned amount will be considered as eligible for priority sector.

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CAIIB Rural Banking Module C Unit 3 ( Ambitious_Baba )