Banks must plan simpler repayment mechanism

In order to provide affordable houses to the economically weaker section (EWS), Reserve Bank of India (RBI) Deputy Governor, Rakesh Mohan, stressed upon the need of a simpler repayment mechanism on part of lending agencies in the country.

"The lending agencies are required to look at the needs of common people and keep matters simple with regard to repayment mechanisms. It is also necessary to simplify documentation process for such home loan seekers," Mohan said.

He was responding to the "make it simple" proposal put forward by Lalit Kumar Jain, Chairman, Kumar Builders, with regard to easy repayment mechanisms for home loan-seekers with irregular flow of incomes.

Mohan said that banks and financial institutions were required to serve the interests of the common man and "make things as simple as possible."

National Housing Bank estimates say that there is a need for additional 45 million housing units in the country for rural and urban areas besides repairs, upgradation of existing units needing an investment of more than Rs 10 lakh crore during the 11th plan period.