Uptil nineteen eighties, bankers in India had difficulty in explaining to motivate / encourage their customers opening joint accounts and the advantages thereof in case of death and eventual settlement of accounts to the legal heirs. Photographers were taken only from illiterate customers with thumb impressions and witnesses. Over a period, these problems were overcome and today joint accounts and nomination have become common. Currently both literate and illiterate customers are asked to submit photographs as also identity proofs (like Driving Licence, Ration Card, PAN Card, Voter Card, Electricity or Phone Bill and so on) in order to comply with the KYC (Know Your Customer) formalities.
Come nineties, the industry has undergone several reforms - be it in customer service, productivity, profitability, technology, net banking, and so on. Reverse Mortgage is one such product exclusive to the senior citizens. Particularly, when the Indian family system is changing.... for better or worse. Nuclear family system has set in. Even those one or two children are getting educated in India or abroad, taking up jobs in urban/metro cities or settling abroad thus switching to modern life styles. With sizeable earnings and comfortable life, they may or may not look back to their parents. (a la, Baaghbaan of Amithabh, Hema). They are willing to send regular amounts for their parents sustenance. Parents are unwilling to join the children and prefer to stay back. But, with the rising costs of living, some times these parents are hesitating to seek support from their children.
In such peculiar circumstances, Reverse Mortgage Loan Scheme works well to assure handsome monthly stream of income to the parents (senior citizen) by mortgaging their encumberance-free house properties. However, it appears in last three years, the scheme has not taken off in India. Of course, it happened in USA, UK and other countries too during eighties... Now, NHB is reviewing the scheme and offering certain modifications to make the scheme more attractive.