To ensure bank credit for housing in rural Madhya Pradesh, the state government has planned to provide title deed to house owners in rural areas. The bankers have denied housing loans under various schemes, including the Golden Jubilee Rural Housing Finance scheme, as rural residential areas are neither registered nor bear any title.
The bankers have, on occasions, urged the state government to frame a policy or guidelines to accord registered ownership to the rural housing so that banks could bring them under ambit of collateral.
"We are planning to take initiative in this direction so that housing can take place in rural areas in a planned manner. The government has a plan to accord title deed to rural house owners through local administrative mechanism," a senior government officials told Business Standard and added, "It is a cumbersome exercise but the government will shortly develop a mechanism to arrange title deeds for the rural people."
Golden Jubilee Rural Housing scheme has attracted hardly any taker in the state. Under the scheme refinance is available at 25 bps less than applicable interest rates and loan is available up to a maximum Rs 15 lakh.
“Bankers have a problem to sanction and disburse housing loans or extend financial assistance to rural people since their plot on which a house is proposed to be constructed does not carry any title. The rural houses are just owned by occupant,” a senior banker said.
Bankers have urged the state government on number of occasions in various state level bankers' committee meetings to ensure title deed for all rural house owners.
The public sector bankers have sanctioned and disbursed approximately few cases of Rs 18.73 crore to only 874 beneficiaries during the financial year 2009-10. The private bankers have evinced no interest in the scheme and have disbursed zero amount for rural housing. The public sector banks namely Bank of Baroda, Bank of India, Allahabad Bank, UCO Bank, Union Bank of India and Syndicate Bank sanctioned few cases.
