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a) GoI decided to start a new scheme Rajiv Awas Yojana (RAY) in order to
create Slum-Free India and
GoI desired to introduce Credit Risk Guarantee Fund Scheme for Low Income
Housing for housing loans upto 5 lakh to new individual borrowers.
INTRODUCTION CONTD
The Budget Proposal Financial Year 2011-12
Honble Finance Minister in his Budget speech for the FY 2011-12 has
announced to set up Credit Guarantee Fund Scheme under Rajiv Awas Yojana
(RAY) to ensure better flow of institutional credit for housing loans in urban
areas to Economically Weaker Section (EWS) & LIG households.
MoHUPA, GoI in consultation with DFS, MOF has formulated the Credit
Guarantee Fund Scheme (CRGFS) to provide credit guarantee support to
Collateral free/third-party guarantee free new individual housing loans upto
Rs.5 lakhs extended by eligible lending institutions for Low Income Housing in
urban areas.
INTRODUCTION CONTD
The Trust has been set up with an initial corpus of Rs.1 lakh. Further
contributions will be made to the corpus by the Settlor and State
Governments who draw on it, in accordance with their slum population, i.e.
Rupees One Thousand crores in the aggregate by the settlor and Rupees
two hundred crores by State Governments.
First tranche of the corpus amounting to Rs 150 crores has been received
by the Trust as of date from the Government of India.
OBJECTIVES
ELIGIBLE LOAN AMOUNT: Housing loan not exceeding Rs.5 lakh per
person sanctioned without any collateral security and/or third party guarantees.
Housing Loans by 90% of the amount in default 85% of the amount in default
Individual Borrowers subject to the ceiling of 90% subject to ceiling of 85% of the
of the sanctioned housing sanctioned housing loan
loan amount amount
GUARANTEE FEE
INVOCATION OF GUARANTEE
A) Lock-in-period: The lender cannot make any claim on Trust for
settlement
a. within the period of 24 months after the last disbursement was made or
b. within the period of 24 months from the date of the guarantee cover
coming into force or
c. 2 months after the completion of the house, whichever is later.
1. The Trust will pay 75 per cent of the guaranteed amount on invocation
claim by the lending institution, within 60 days of applying for the
settlement of claim, subject to the claim being otherwise found in order
and complete in all respects.
3. On a claim being paid, the Trust shall be deemed to have been discharged
from all its liabilities on account of the guarantee in force in respect of the
borrower concerned.
GUARANTEE CLAIM
APPROPRIATION OF RECOVERY AMOUNT
1. any amount recovered by the lending institution towards defaulted loan will be
deposited with Trust.
2. After settling all its dues the balance, if any, shall be appropriated in such a
manner so that losses on account of deficit in recovery of the housing loan
between the Trust and the lending institution are in the proportion
a) of 90% and 10%, respectively, in the case of housing loans upto 2 lakh
b) and 85% and 15%, respectively, in the case of housing loans above 2 lakh
and upto 5 lakh.
RESPONSIBILITIES OF LENDING
INSTITUTIONS
The responsibilities of the lending institutions inter-alia,
Benefits to Lenders
Credit Risk transferred to the Trust.
Credit enhancement EWS and LIG households will result in increased credit
flow from lenders for this segment.
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