National Housing Bank (NHB) Signs MoUs with 116 Lenders to Drive PMAY-U 2.0's Affordable Housing Vision

The Pradhan Mantri Awas Yojana-Urban (PMAY-U) has been pivotal in addressing urban housing challenges in India. Building on this success, PMAY-U 2.0 continues the focus on providing affordable housing, with recent developments reinforcing this commitment. In a significant move, the National Housing Bank (NHB) has signed Memorandums of Understanding (MoUs) with 116 Primary Lending Institutions (PLIs) to implement the Interest Subsidy Scheme (ISS) under PMAY-U 2.0. This step plays a crucial role in the government’s ongoing efforts to make housing more accessible for the urban poor and middle-class families.

The MoUs were formalized during a workshop on PMAY-U 2.0 in New Delhi. The event was attended by Manohar Lal Khattar, the Union Minister of Housing & Urban Affairs and Power, who discussed the role of banks and financial institutions in ensuring smooth interactions between borrowers and lenders. The scheme is designed to provide interest subsidies to households across various income groups, improving housing affordability in urban areas.

PMAY-U 2.0, launched by Prime Minister Narendra Modi on September 17, 2024, aims to provide financial assistance to one crore urban families over the next five years. The updated version of the scheme builds on the previous one, using feedback from stakeholders to improve its design and effectiveness. The introduction of a Unified Web Portal for the ISS by the Ministry of Housing and Urban Affairs (MoHUA) and the National Informatics Centre (NIC) is a key development, simplifying the application and subsidy disbursement process.

The participating PLIs include a range of financial institutions such as housing finance companies, public and private sector banks, regional rural banks, small finance banks, and cooperative banks. This broad participation indicates the scheme’s wide appeal and potential to address urban housing shortages effectively.

During the workshop, government officials highlighted the importance of housing for social and economic security. Srinivas Katikithala, Secretary of MoHUA, described PMAY-U as the world’s largest housing initiative, and emphasized the need for solutions that align with the needs of younger generations and technological changes. M.P. Tangirala, Additional Secretary of the Department of Financial Services, acknowledged the efforts of NHB and financial institutions in supporting the Credit Linked Subsidy Scheme (CLSS), urging all stakeholders to collaborate further to achieve the scheme’s goals.

Sanjay Shukla, Managing Director of NHB, spoke on the significance of housing for individual well-being and national development. He urged the housing finance sector to strengthen its efforts to ensure the success of PMAY-U 2.0, noting that feedback from beneficiaries helps motivate lenders and sustain their involvement in affordable housing programs.

Kuldip Narayan, Joint Secretary (HFA) at MoHUA, expressed confidence that the ISS would help address housing shortages and improve the outcome of housing schemes. He pointed out that PMAY-U 2.0 builds on lessons learned from previous versions, focusing on issues such as the challenges in the Credit Linked Subsidy Scheme. The updates aim to make the program more efficient and impactful.

The workshop also addressed the growing need for urban housing solutions as India’s urban population continues to rise. PMAY-U 2.0, with its focus on financial inclusion and practical solutions, is well-placed to meet these challenges.

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