Pradhan Mantri Awas Yojana (PMAY)

The Pradhan Mantri Awas Yojana (PMAY) was launched by the Honourable Prime Minister of India. The Government of India has envisioned “Housing for All” by 2022 when the Nation completes 75 years of its Independence.

The Ministry of Housing & Urban Poverty Alleviation has approved the scheme and the Bank has implemented the programme Promotion of Affordable Housing for weaker section through credit linked subsidy under the scheme PMAY.

Beneficiaries of Economically Weaker section (EWS) and Low Income Group (LIG) seeking housing loans from Banks, Housing Finance Companies and other such institutions would be eligible for an interest subsidy at the rate of 6.5 % for tenure of 15 years or during tenure of loan whichever is lower. The Net Present Value (NPV) of the interest subsidy will be calculated at a discount rate of 9 %.

The credit linked subsidy will be available only for loan amounts up to Rs 6.00 lakhs and additional loans beyond Rs. 6.00 lakhs, if any, will be at nonsubsidized rate. Interest subsidy will be credited upfront to the loan account of beneficiaries through lending institutions resulting in reduced effective housing loan and Equated Monthly Instalment (EMI).

Credit linked subsidy would be available for housing loans availed for new construction and addition of rooms, kitchen, toilet etc. to existing dwellings as incremental housing. The carpet area of houses being constructed under this component of the mission should be up to 30 square metres and 60 square metres for EWS and LIG, respectively in order to avail of this credit linked subsidy. The beneficiary, at his/her discretion, can build a house of larger area but interest subvention would be limited to first Rs. 6.00 lakh only.