With increase in average life expectancy and change in life style the number of Senior Citizens is increasing in Indian Society. They need personal care and regular cash flow but the collapse of joint family system has made their situation vulnerable.

Indian Banking System very well takes care of this section. Banks offer better rate of interest on deposits of old age depositors simultaneously a number of schemes are there to finance Senior Citizens.

Senior Citizens drawing regular monthly pension are provided Personal loan up to the amount of Six to Twelve months gross pension. Personal Loan amount is recovered in Six to Twelve equated monthly installments. Pensioner has to sign simply a Demand Promissory Note, Authority Letter to deduct installments from the pension to be paid by the Bank. Banks are not concerned with the end use of the funds.

Recently different Banks have launched a new Personal loan scheme for Senior Citizens based on the Reverse Mortgage of the landed property.

Major chunk of the society, service class in particular create property at the fag end of their functional life i.e., near to retirement and get starved of the liquidity. In the changing scenario Kith & Kin enjoy the facility created by the seniors but never come forward for their rescue. Reserve Bank of India envisaged the miseries of this helpless section of the society and proposed the Banks to design the scheme of finance to ensure additional source of income on regular basis.

Banks also preempted vast potential vested in the proposal and launched well designed schemes best suited to Sr. Citizens as well as Banks.

Under the scheme one has to apply for loan with full particulars of property and offer to mortgage the same with the Bank. Bank will assess fair value of the property and estimate period of loan.

After execution of certain security documents and creation of mortgage of property in Bank's favour he will start getting a fixed amount every month from the Bank.

Loan is repayable on:

1)      On demise of loanee.

2)      If loan is availed by both husband and wife on the demise of survivor.

3)      On moving out of premises permanently.

4)      Liquidation of loan with up to date interest.

5)      Legal heirs will be having first right to settle the loan account within six months of the demise of borrowers.

Other terms and conditions:

1)      Borrower will be required to submit Life Certificate every year in the month of November.

2)      Property mortgaged will be insured at the cost of borrower.

3)      Bank reserves the right to recall the loan under certain conditions/circumstances.

4)      All legal expenses will be borne by the loanee.

5)      All Taxes and Govt. dues are to be paid by the owner of the property.

6)      Borrower will be required to pay processing fee as decided by the Bank.

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