Housing and Urban Affairs Ministry, Allahabad Bank ink MoU for web portal to process

Allahabad Bank MD and CEO Usha Ananthasubramanian and Joint Secretary in the ministry Sanjay Kumar signed the Memorandum of Understanding.

Published: 09th January 2018 09:02 PM  |   Last Updated: 10th January 2018 01:08 AM   |  A+A-

By PTI

NEW DELHI: The Housing and Urban Affairs Ministry today inked an MoU with Allahabad Bank for setting up an online portal for processing interest subsidy to be paid to people who availed loans under the Centre's DAY-NULM scheme.

The move is aimed at faster payment of subsidy to the people and enhanced monitoring system with availability of a mechanism to ascertain whether the subsidy has reached the beneficiary or not, an official release said.

Under the Self-Employment Programme (SEP) component of Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM), loans up to Rs 2 lakh is available to individuals in urban areas for setting up micro-enterprise. The loan limit is 10 lakh for a group.

Besides, loans are also available for self-help groups (SHGs) under the scheme.

Interest subvention from the ministry is available for the amount of interest charged over and above 7 per cent, by the banks, and women SHGs are eligible for additional three per cent subvention on timely loan repayment.

Currently, processing of interest subvention is done manually. Banks submit claims to urban local bodies (ULBs) on a monthly basis, who then verify and settle them – a tedious and time-taking process.

Besides, the current system has no mechanism to ascertain whether a beneficiary has received subsidy or not, the release said.

As on December 31, 2017, the interest subsidy claimed by banks was Rs 204.27 crore against an estimated amount of subsidy claim of Rs 700 crore (FY 2014-15 to Q3 2017-18).

"The web portal will provide an end-to-end solution for processing interest subsidy for NULM schemes. The subsidy will be credited to Aadhaar-linked beneficiary account in a seamless process through Direct Benefit Transfer (DBT) mode," the release said.

Allahabad Bank will charge a service fee of 1.05 per cent of interest subsidy amount released, it said, adding the online portal will be functional by the beginning of 2018-19 fiscal.

Allahabad Bank MD and CEO Usha Ananthasubramanian and Joint Secretary in the ministry Sanjay Kumar signed the Memorandum of Understanding (MoU) in presence of Union minister Hardeep Singh Puri.

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