The Central Bank of India, under the Interest Subsidy Scheme for Housing the Urban Poor (ISSHUP), has a cleared housing loan proposal by the Ahmedabad Municipal Corporation for developing low-cost housing units for urban poor in the city. The sanctioned loan amount is Rs 120 crore.

The total estimated cost of this pilot project is Rs 350 crore, under which the housing units will be developed in area of six-lakh sq m.

IP Gautam, AMC commissioner, said, "We are building houses at 29 locations in Ahmedabad. At some places, we have completed construction."

Under this, the bank will provide home loans at subsidised interest rate to urban poor, with a maximum limit of Rs 60,000 for a period of 15 to 20 years.

"As the interest rate subsidy under the scheme is 5 per cent, the effective rate of interest rate for home loan taker will be around 3 per cent," Sridhar said.

The project is a part of Jawaharlal Nehru National Urban Renewal Mission (JNNURM), which aims to low cost affordable housing for lower sections.

In a recent meeting with the union Finance Minister, Pranab Mukherjee; the Urban Development Minister Reddy urged the government to increase the allocation for the ministry considering the critical infrastructure projects like Jawaharlal Nehru National Urban Renewal Mission which are in pipeline.