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Pradhan Mantri Awas Yojana (PMAY) has seen a successful implementation, leading to the launch of PMAY 2.0 on August 9, 2024. This updated scheme is a credit-linked subsidy scheme (CLSS) designed to assist individuals in purchasing or constructing homes. However, it is important to note that under specific circumstances, the government reserves the right to withdraw the interest subsidy provided under the PMAY initiative.Circumstances Leading to Subsidy WithdrawalAccording to Amarendra Kumar, General Manager of Punjab National Bank, there are three key situations that may result in the withdrawal of subsidies under the Pradhan Mantri Awas Yojana:If a borrower fails to repay the loan and their account becomes a Non-Performing Asset (NPA).Even if the subsidy has been granted, it can be revoked if the construction of the house is halted for any reason.The subsidy may also be withdrawn if the required certificate of use or end use is not submitted within one year.How the PMAY Subsidy WorksUnder the Pradhan Mantri Awas Yojana (PMAY), the interest subsidy is applied to a borrower's loan account from the outset, effectively lowering their Equated Monthly Installment (EMI). This scheme provides subsidies based on various categories, ensuring targeted assistance. For instance, borrowers from Economically Weaker Sections (EWS) and Low-Income Groups (LIGs) receive a 6.5% interest subsidy, making home ownership more affordable for these groups.Impact of Subsidy Removal on EMIsThe withdrawal of the subsidy can result in an increase in the borrower's Equated Monthly Installment (EMI). Anuj Sharma, COO of IMGC, explains that the PMAY subsidy effectively lowers the borrower's interest rate. If the subsidy is terminated, the borrower will need to repay the loan at the original interest rate, leading to a rise in their EMI.Important Considerations for BorrowersBorrowers should seek information from their banks regarding the specific circumstances that may lead to the withdrawal of the subsidy. Additionally, it is essential to have all necessary documents, such as the utilization certificate and income certificate, prepared and readily available to ensure compliance with the requirements of the Pradhan Mantri Awas Yojana.

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