On Friday in a news conference deputy general manager K M Purushothaman of Union Bank of India announced reverse mortgage scheme for senior citizens. Speaking in news conference he said that the facility has been introduced in view of the Finance Minister’s offer in the union budget presented in February.
Under this scheme those aged above 60 and having land and house of their own can will be benefited. As per the scheme, the bank will provide the senior citizen a fixed amount for his/her day-to-day expenses, health care and other expenses on a monthly basis. The time period of the loan will be a maximum of up to 15 years.
The specialty of the scheme is that there will not be any repayment. The principal amount and interest will be estimated in advance and the same would be realized by selling the property when the loan period expires or after the death of the senior citizen and his/her spouse. In this scheme there will be the facility for the borrower to sell the property before the expiry of the loan period and settle the loan. A fixed interest of 10 percent will be charged. The lowest limit of the loan amount will be Rs 1 lakh and the higher will be Rs 50,00,000.
The bank has introduced a deposit scheme. In this new scheme launched on April 10, the interest rate will be 9% on the deposit for 400 days. Senior citizens will get another half percent additional interest. Purushothaman remarked that other banks were giving only 8.25 percent to 8.50 percent on deposit for one year.
Interest rate on commercial and housing loans will be available according to time slab i.e. 9.25 percent for 5 years, 9.5 percent for 10 years and 9.75 percent for 15 years. Loan for a period of over 15 years will be charged at 10 percent. He said loans availed of at a higher rate from the new generation private banks can be transferred to the Union Bank of India.
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