The Hindu Business Line : Reverse mortgage

The scheme of reverse mortgage will be a welcome and a novelty in India, seeking as it does to address the financial needs of senior citizens and help them in the upgradation, renovation and extension of their residential property as well as meet expenses of their medical treatment, children's marriage, etc.

The scheme also has the object of providing money to supplement pension or other income of senior citizens. But the perceived market for the reverse mortgage loan product in India is very small and restricted. According to an estimate the market size will be about Rs 5000 crore.

It may not be viable for all banks and HFCs to launch schemes for tapping such small market.

People in India are emotionally attached to their residential houses. Many may not like to sacrifice their houses for the sake of present-day comfortable living.

The scheme may be of relevance and use for those who are childless and have no brothers or sisters. In spite of limited market size, however, the scheme is worth a try.

The market for the scheme will also depend on the extent of involvement and efforts of banks at the implementation of the scheme.

K.K.Ammannaya

Udupi

Letters to the editor and contributions can be sent by e-mail to: bleditor@thehindu.co.in

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