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HUA Ministry, Allahabad Bank ink MoU for web portal to process

Press Trust of India  |  New Delhi 

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

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

Under the Self-Employment Programme (SEP) component of (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 or not, the release said.

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

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

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

MD and and in the ministry signed the Memorandum of Understanding (MoU) in presence of Union minister

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, January 09 2018. 20:55 IST