New Delhi: The reverse mortgage scheme offered by various banks in India has got a boost with the National Housing Bank (NHB) deciding that it will refinance the banks and Housing Finance Companies (HFCs) to provide reverse mortgage to senior citizens in India. NHB will also guarantee that the banks and HFCs make regular payments to the senior citizens for the entire duration of the reverse mortgage.

Established 9th July 1988 under National Housing Bank Act, 1987, National Housing Bank (NHB) is the premier agency, which promotes housing finance institutions and provides financial and other support to them. NHB issues directions to housing finance institutions to ensure their growth on sound lines. It also provides financial assistance to scheduled banks and housing finance institutions or to any authority established by or under any Central, State or Provincial Act and engaged in slum improvement and formulates schemes for the purpose of mobilisation of resources and extension of credit for housing.

Bankers were concerned on defaults and recovery involved in reverse mortgage issued to senior citizens. With the NHB coming into picture, the banks have little to fear now. In case something happens to the borrower NHB will make the payments to bank. NHB will also launch counselling centers at different location starting with its branch office in Delhi. According to the NHB chairman S Sridhar, NHB is also holding talks with IRDA and insurance providers to club the reverse mortgage with insurance plan, which will provide income to senior citizens after the reverse mortgage tenure of 15 years have been completed.