PSBs explore new home loan evaluation method

11 Nov 2024 , 12:33 PM

Preliminary discussions have been held by a few major state-owned banks to investigate the idea of providing home loans to individuals who do not often have tax returns, employer certificates, or proof of income.

In contrast to the standard distribution under “affordable housing” programs, this idea would evaluate borrowers’ income in different ways, such as taking into account a street vendor’s transaction volume based on his QR code credits.

Another method would be to use the number of patrons and average billing to estimate the business of a roadside restaurant.

The proposal is being pursued at a time when the Cabinet has authorised government funding for the construction of three crore homes under the Pradhan Mantri Awas Yojana (PMAY) 2024 flagship program.

Rehabilitating slum dwellers, credit-linked subsidy programs for economically disadvantaged groups, low- and middle-income groups that receive interest subsidies for purchasing or constructing homes, and partnerships to provide affordable housing are all examples of PMAY.

The PM-Vidyalaxmi plan, which aims to assist deserving students in overcoming financial barriers to higher education, was approved by the Cabinet one week ago. Anyone accepted into “quality higher education institutions” (as determined by the National Institutional Ranking Framework) will be eligible for collateral-free, guarantor-free bank and financial institution loans to pay for tuition and other course-related costs under this program.

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