THE ESM CORNER

FINANCIAL HELP AS INTEREST SUBSIDY ON HOME LOANS TO ESM

ESM-CORNER-EX-SERVICEMEN-HOME-LOAN-SUBSIDY

The Kendriya Sainik Board (KSB) is a nodal agency that provides welfare services to Ex-Servicemen (ESM) and their families. One of the schemes that KSB offers is the reimbursement of interest on home loans taken from banks or other reputed organizations by the war-bereaved, war-disabled, and attributable peacetime casualties. This scheme aims to provide a small measure of relief to these categories of Ex-Servicemen who want to construct their own house. This article will explain the background, aim, eligibility, and procedure of this scheme.

BACKGROUND

This scheme provides interest subsidy on home loans for Ex-Servicemen who are war-bereaved, war-disabled, or peacetime casualties. The scheme started before 1991 with a limit of Rs 70,000/-, even if the loan was higher. It was revised in May 1991 to Rs 1,00,000/-. The scheme gives back half of the interest charged by the banks or government/public sector including LIC, GIC, and HUDCO.

AIM

This grant aims to provide a small measure of relief to the war-bereaved, war-disabled, and attributable peacetime casualties (all ranks) who want to construct their own house. The grant is given out of the Armed Forces Flag Day Fund (AFFDF) which is a corpus fund created by voluntary donations from the public and the armed forces personnel.

FINANCIAL ASSISTANCE

The reimbursement of interest on home loans taken from banks or other reputed organizations for the construction of houses is provided out of the AFFDF. The upper existing limit for the eligibility of the interest subsidy is Rs 1,00,000/-, even though the loan taken may be of a higher amount. 50% of the interest charged by the banks or government/public sector including LIC, GIC, and HUDCO would be reimbursed as an interest subsidy. The interest subsidy would be payable half-yearly directly to the applicant. The subsidy will be paid up to a maximum period of five years or the date of final repayment of the loan, whichever is earlier.

 ELIGIBILITY CONDITIONS FOR EX-SERVICEMEN

The eligibility conditions for availing the financial assistance under this scheme are as follows:

  • The applicant must be an ESM who is War Bereaved, War Disabled, or Attributable Peace-time Casualty, and the Ex-Servicemen should be of any rank from the Army/Navy/Air Force.
  • The applicant must apply within 180 days from the date of sanction of the home loan, and submit the required documents, attested by the Zila Sainik Welfare Officer (ZSWO).
  • The applicant must have availed a home loan of up to Rs 1 lakh or more, as per the sanction letter, and must have paid the interest on the loan, as per the bank statement.
  • The applicant must be recommended by the respective Zila Sainik Board (ZSB) and Rajya Sainik Board (RSB), which are the nodal agencies for the welfare of Ex-Servicemen and their families at the district and state levels respectively.
  • The applicant should not be covered under a similar scheme of the Army/Navy/Air Force.

CHANNEL OF APPLICATION

To apply for financial assistance under this scheme, the Ex-Servicemen must submit an online application on the KSB web portal, along with scanned copies of the required documents. The ZSWO will verify and recommend the application, and forward it to the RSB for further recommendation. The RSB will then forward the application to the KSB for final approval and sanction. The application must be accompanied by the following documents, scanned and uploaded on the portal:

  • Service document/discharge book of Ex-Servicemen, showing the rank, service number, name and date of birth of the Ex-Servicemen.
  • Identity card of Ex-Servicemen, issued by the ZSB.
  • Evidence of the nature of the casualty, such as medical reports, death certificates, disability certificates, etc.
  • Sanction letter of the home loan, showing the details of the loan amount, interest rate, tenure, etc.
  • Bank statement of the Ex-Servicemen, showing the interest paid on the home loan.
  • Bank passbook and a cancelled cheque, showing the bank account number, IFSC code and personal details of the Ex-Servicemen.

PROCESSING AND PAYMENT

The KSB Secretariat will receive the applications from the RSBs and enter them on the computer in batches. They will check and verify the entries and send them for approval. The applications will be approved by the competent authority in one batch, every three months if possible. The Welfare Section will then process the payments and send them to the Accounts Section. The Accounts Section will pay the beneficiaries directly as per the funds available. The payment will be done twice a year, in advance.

CONCLUSION

The scheme of RMEWF-Financial Assistance as Interest Subsidy on Home Loan to Ex-Servicemen is a relief scheme for the veterans who have served the nation with honour and devotion. The scheme provides a financial grant to ESM who are War Bereaved, War Disabled, and Attributable Peace-time Casualties for the interest paid on their home loan, which can help them construct their own house and live a comfortable life. The scheme is funded by the AFFD Fund.

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