Author(s) :

M Abdul Basid, Babu S.

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Abstract :

The Reverse Mortgage Scheme (RMS) in India was introduced in 2007 with the objective of providing financial security to senior citizens by allowing them to convert the equity in their residential property into a regular stream of income. Under this scheme, individuals aged 60 years and above can avail periodic payments from a lender while retaining ownership and occupancy of their home. Unlike conventional loans, repayment is not required during the borrower's lifetime, and the loan is typically recovered from the sale of the property after the borrower's death or permanent relocation. Despite its potential to address post-retirement financial challenges, the scheme has witnessed limited acceptance in India. Factors such as low awareness, emotional attachment to ancestral property, societal perceptions, lack of financial literacy, and procedural complexities have hindered its widespread adoption. This paper critically examines the structure, implementation, benefits, and limitations of the RMS in the Indian context. It also highlights the need for robust policy measures, awareness programs, and collaboration between financial institutions and government bodies to improve the outreach and effectiveness of the scheme. The Reverse Mortgage Scheme, if effectively promoted, holds promise as a viable financial tool for empowering the elderly population in India.

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