The Hindu : KSHB loan settlement scheme comes into effect

Online edition of India's National Newspaper
Tuesday, Feb 10, 2004

Kerala

Kerala

KSHB loan settlement scheme comes into effect

By Our Special Correspondent

THIRUVANANTHAPURAM, FEB. 9. The Government has approved a one-time settlement scheme for the recovery of loans given by the State Housing Board, the Revenue Minister, K.M. Mani, said here the other day.

The scheme, which comes into effect from today, would benefit about two lakh persons.

The Minister said the Housing Board had loan outstandings totalling Rs. 650 crores, of which Rs. 233 crores were in default. The scheme would help the Board to clear its non-performing assets.

Mr. Mani said the KSHB would waive dues totalling Rs. 70 crores under the scheme. It hoped to recover Rs. 163 crores through it.

He said the economically weaker sections and low-income groups would be required to remit only the principal and interest under the scheme if the term of the loan is over. The default interest and penal interest would be waived. Only the principal would be collected from those who had become insolvent on account of diseases or the death of the person who had taken the loan.

The middle and high-income groups would have to pay a penal interest of 2.5 per cent and 30 per cent of the default interest for settlement. These benefits would be available, on application by the loanee, even in cases where revenue recovery had been initiated.

If the term of the loan is not over, those paying up the arrears in full would be fully exempted from penal interest. The default interest payable by low, medium and high income groups would be cut by 50 to 70 per cent. Economically weaker sections would be fully exempted from payment of default interest. Beneficiaries who had been paying their monthly instalment in time would be given an interest concession of 0.5 per cent. Besides, those paying up the balance of their outstanding loan in full would be given a reduction of 5 per cent of principal.

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