Central Bank to launch reverse mortgage loan

Shortly after the country's largest lender State Bank of India (SBI) announced its foray into the reverse mortgage loan market, Central Bank of India said it will also enter the business soon.

"We plan to launch our reverse mortgage loan business soon. Thiswould be one of the many customised innovative products we will bring forth in the next couple of months," managing director, Central Bank, H A Daruwalla told reporters.

Reverse mortgage loans are products that enable senior citizens to avail loans against the security of their houses.

The borrowers do not have to repay the loan during their lifetime. Thereafter, the legal heirs can repay the loan, failing which the bank will liquidate the loan by selling the property.

SBI had launched the product on October 12, with an annual fixed interest rate of 10.75 per cent for citizens above 60 years of age.

Bank of Baroda, which had also previously announced its foray into the reverse mortgage loan market, is understood to have scheduled its launch in November.

Central Bank also plans to introduce a special savings deposit scheme for children with insurance wrap, sale of gold coins and premium deposit accounts, Daruwalla said.

"The bank has aggressively moved towards modernisation and technology-driven initiatives. We have computerised 99.26 per cent of our branches, while 747 branches and 105 extension counters have been brought under the Core Banking Solution (CBS)," the MD added.