The Refinance Scheme is a scheme through which collateral free loans are extended towards Persons with Disabilities (PwDs). The Refinance Scheme comes under the Credit Guarantee Scheme (CGS) of the Government of India. The main purpose of the Refinance Scheme for Regional Rural Banks (RRBs) is to offer the facility of availing a collateral free loan to Persons with Disabilities (PwDs) for the purpose of higher education or self-employment.
The loans are offered through Regional Rural Banks (RRBs), Public Sector Banks (PSBs), and other institutions which are eligible under the Credit Guarantee Scheme (CGS) of the Government of India.
The loans are offered at the National Handicapped Finance and Development Corporation (NHFDC) interest rate.
The eligibility criteria for the Regional Rural Banks (RRBs), Public Sector Banks (PSBs), and other institutions to be enrolled under the Credit Guarantee Scheme or CGS are as follows:
The eligibility criteria for the beneficiaries (with any sort of disability) opting for the Refinance Scheme can be summed up as follows:
The eligibility criteria for the purpose of taking the loan are as follows:
The loans can be taken for either self-employment activities or for education purpose. The rate of interest for both the cases are listed below:
Rate of interest chargeable for self-employment purpose (for men with disabilities)
Loan quantum (Rs.) | Interest to be paid by banks etc. to NHDFC | Interest to be paid by the beneficiary to banks etc. |
Up to Rs.50,000 | 2% | 5% |
More than Rs.50,000 but less than Rs.5 lakh | 3% | 6% |
More than Rs.5 lakh but less than Rs.15 lakh | 4% | 7% |
More than Rs.15 lakh | 5% | 8% |
Under the provisions of the Mahila Samridhi Yojana, women who have disabilities who opt for the refinance scheme are eligible for a special rebate of 1% on the interest payable. The rates of interest for women are as follows:
Loan quantum (Rs.) | Interest to be paid by banks etc. to NHDFC | Interest to be paid by the beneficiary to banks etc. |
Up to Rs.50,000 | 1% | 4% |
More than Rs.50,000 but less than Rs.5 lakh | 2% | 5% |
More than Rs.5 lakh but less than Rs.15 lakh | 3% | 6% |
More than Rs.15 lakh | 4% | 7% |
Rate of interest chargeable for education purpose (for men with disabilities
Loan quantum (Rs.) | Interest to be paid by banks etc. to NHDFC | Interest to be paid by the beneficiary to banks etc. |
Up to Rs.10 lakh for studying in India | 1% | 4% |
Up to Rs.20 lakh for studying abroad | 1% | 4% |
Women with disabilities who opt for the refinance scheme are eligible for an exclusive rebate of 0.5% on the interest payable. The rates of interest for women are as follows:
Loan quantum (Rs.) | Interest to be paid by banks etc. to NHDFC | Interest to be paid by the beneficiary to banks etc. |
Up to Rs.10 lakh for studying in India | 0.5% | 3.5% |
Up to Rs.20 lakh for studying abroad | 0.5% | 3.5% |
The period for repayment are as follows:
100% refinance of their share will be provided by the National Handicapped Finance and Development Corporation (NHFDC) to the Regional Rural Banks (RRBs), Public Sector Banks (PSBs), and/or other institutions.
Any defaults made while repaying the principal along with interest of the National Handicapped Finance and Development Corporation (NHFDC) dues might be attracting liquidated damages at 2% p.a. The liquidated damage will be counted in addition to the regular rate of interest.
The loan has to be disbursed by the Regional Rural Banks (RRBs), Public Sector Banks (PSBs), and/or other institutions to the beneficiaries within 90 days from the date of receiving the funds from the National Handicapped Finance and Development Corporation (NHFDC). A interest of 3% p.a. will be charged in addition to the normal rate of interest on the unutilised amount for the next 90 days. Following that, the amount which is not disbursed has to be refunded to the National Handicapped Finance and Development Corporation (NHFDC) by the Regional Rural Banks (RRBs), Public Sector Banks (PSBs), and/or other institutions. An additional penal interest of 2% will be charged till the date of refund.
The Regional Rural Banks (RRBs), Public Sector Banks (PSBs), and/or other institutions will be eligible to receive an amount which is equal to 0.50% of the repayment that has been made by them in the past financial year, if they are able to fulfil the criteria which are prescribed by the National Handicapped Finance and Development Corporation (NHFDC).
The eligibility criteria are as follows:
Either of the conditions mentioned above has to be fulfilled by an institution in order to be eligible for the incentives.
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