Representative image of home loan.
Credit: iStock Photo
Finance Minister Nirmala Sitharaman unveiled the first budget of the Modi 3.0 government on July 23. After the recently concluded budget session, the Finance Ministry has initiated a process to provide home loans for those whose 'creditworthiness' cannot be determined.
A report by The Indian Express suggests that people other than taxpayers or salaried employees can avail home loans based on their digital footprints.
This comes in the wake of the Centre's proposal of a new credit assessment model of MSMEs (Micro, Small, Medium enterprises), which will be different from the current model, which takes MSME balance sheets and account statements into consideration before granting any loan.
Here too, banks will focus on the digital payments' footprint of a company before giving them loans.
Financial Services Secretary Vivek Joshi told the publication that the new model that is being developed for the housing sector and banks have worked on the model.
"As of now, home loans from banks are available only to those who are salaried or are a tax returnee," he said.
He then added that people who don't have the required documents, under the new model banks will lend them after monitoring their digital footprints.
He further said that any business owner can show their bank account details or electricity bill in order to avail loans.
"This will help in providing loans to more number of MSMEs," he said.
He also mentioned that the new model will no longer require external credit rating for granting loans. So, the new model has told banks to have their own internal rating.
"Banks do it even now also, for instance, if you take external ratings, it is not like the loan would be given on that basis only. They will rate you again (internally)," he said, according to the publication.
Union Budget 2024 LIVE | Making a record for any Finance Minister, Nirmala Sitharaman presented her 7th consecutive Union Budget on July 23, 2024 under the Modi 3.0 government. This Budget brought tax relief for the middle class, while focusing on jobs through skilling, incentivising employers. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.