The Hindu 18.11.2010
Banks reluctant to give JNNURM housing loans
G.V.R. Subba Rao
| As many as 4,382 beneficiaries in the city eagerly await sanction |
The Union Government, in all, sanctioned 21,752 houses for Vijayawada
VMC shouldered Rs.13 crore towards loan component of beneficiaries
VIJAYAWADA: The disinclination of banks to sanction loans to beneficiaries of housing under Jawaharlal Nehru National Urban Renewal Mission has turned into a stumbling block for the progress of the scheme in the city.
As many as 4,382 beneficiaries in the city are eagerly awaiting sanction of bank loan. The Vijayawada Municipal Corporation completed construction of 5,440 houses and allotted 3,874 of them to beneficiaries during the last couple of years. Many of them have occupied the houses as well. The Corporation is shouldering the burden of beneficiaries' loan component too, as the bankers have not sanctioned loans to many applicants because tenure rights have not been accorded to the beneficiaries till now. The Corporation bore about Rs.13 crore toward loan component until now, official sources say.
The bankers, sources say, are not willing to sanction loans to the beneficiaries. The bankers told the State government that they were unable to process the loan applications as the audit team raised a few objections. The bankers, referring to the audit objections, stated that the loans could be issued only if JNNURM housing was brought under the purview of the Andhra Pradesh Revenue Recovery Act, 1864.
Principal Secretary of Municipal Administration and Urban Development Department held a meeting with bankers and commissioners of mission cities on October 20 to sort out these issues.
Caveat
Subsequently, it was decided to include a caveat related to recovery of bank dues as per the AP R&R Act, 1864 in the title deed being issued to the beneficiaries. The municipal corporations would float a revolving fund of Rs. 5 lakh to pay upfront registration charges on behalf of the beneficiaries. The charges would be recovered from the bank as part of the loan repayable by the beneficiary. The bankers were asked to disburse at least 20,000 loans in mission cities before December 15, sources say.
The Union Government, in all, sanctioned 21,752 houses for Vijayawada under Basic Services for Urban Poor (BSUP), a sub-mission of JNNURM. Of these, 14,968 houses were proposed to be taken up in phase-I and 6,784 in phase-II. The State government pegged the unit cost of the houses taken up in phase-I at Rs.1.32 lakh and those of phase-II at Rs.1.40 lakh. Of this, the beneficiaries will have to pay Rs. 10,000 as contribution for allotment of a dwelling unit, and also agree to repay a bank loan of Rs. 30,000. The VMC officials hope that the bankers would sanction loans following the Government's assurance.
