Up to 20% of the customers taking loan from our bank are eligible under the Pradhan Mantri Awas Yojana (PMAY) scheme, said
Housing Development Finance Corporation (HDFC).
Speaking to CNBC-TV18,Keki M Mistry, vice chairman and chief executive officer, said the payment from the government for PMAY scheme is very prompt.
Mistry said if anyone is looking to buy a house, then this is the incentive that you need and this is the right time to buy a house.
What kind of a boost this would be for affordable housing in general?
In the scheme, there are three categories of customers. One, borrowers in the economically weaker section, second is middle-income group (MIG)-I and third is middle-income group (MIG)-II.
In the middle-income group, there were three conditions that has to be satisfied for a person to avail up the subsidy. The first condition was that he should not be owning any other house at that point of time. The second condition was that the size of the dwelling unit has to less than 150 square meter, which has now been increased to 200 square meter and the third condition was that the income of the individual has to be Rs 18 lakh a year.
The 150 square meter area would have been a constraint in some of the smaller towns, because in smaller towns people generally tend to stay in bigger houses as land is easily available, land prices are lower and people generally construct larger houses. So, those category of customers would not have been eligible for the benefit because of the restriction on the area of the dwelling unit. But now these customers will be eligible by virtue of 150 square meter becoming 200 square meter.
A couple of months back when we had a tweak there was first round of relaxation on the Credit Linked Subsidy Scheme (CLSS) scheme and now we have this one. How would you rate it success for the MIG-II category and now what is the additional boost that housing finance companies can hope for?
The scheme per say, has been very successful. First of all, how does this scheme works. In the MIG-II category, which I was talking about, I mentioned the three conditions that needs to be satisfied. If these three conditions were satisfied, then any loan that person takes to buy a house on up to Rs 12 lakh, there would be a 3% subsidy, which will be provided by the government for the life of the loan and that subsidy amount will be discounted to its present value and paid upfront to the lender.
So, effectively that works out to about Rs 230,000-250,000 of direct cash benefit that a customer gets. Obviously, it’s a decent and big amount. To a middle income or a lower middle income person, such a big amount to receive is a big boost and a big encouragement for him to buy a house. So, if anyone is looking to buy a house, then this is the incentive that you need and this is the right time to buy a house.
How has the repayment from the government been so far in terms of subsidies and how many claims has HDFC made under Pradhan Mantri Awas Yojana (PMAY) scheme?
I do not have the exact numbers, but it has been a decent number. I would be speaking very-very approximately, about 20% of the customers that take a loan, become eligible for this benefit.
The payment from the government has been prompt. You give the details at the end of the month and you get the subsidy amount soon. In a moment we get the amount and we credit it to the customer’s account. When we credit it to the customer’s account, effectively it acts like part repayment of the loan that he has to pay.