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About Abhyudaya Cooperative Bank

Mumbai was known for its mills in the late fifties and sixties. The mills were the principal employers during those times. However, the conditions of these mill workers were not satisfactory. They did not have access to proper banking facilities. Sensing their plight, a group of dedicated social workers and labour movement activists established the Abhyudaya Cooperative Credit Society Ltd in 1964. This credit society catered to the financial needs of these mill workers living in Parel, Kalachowki, and Sewri in Mumbai.

Within a year, the cooperative credit society converted to an urban cooperative bank with the establishment of Abhyudaya Coop Bank Ltd in June 1965. Abhyudaya Cooperative Bank acquired the status of a scheduled bank in September 1988. The bank spread its wings to the neighbouring states of Gujarat and Karnataka. A series of mergers with small cooperative banks facilitated the growth of Abhyudaya Coop Bank Ltd into a multi-state cooperative bank. Today, the bank is a reputed one in these three states.

Abhyudaya Cooperative Bank Home Loan

Abhyudaya Cooperative Bank offers a variety of loan products such as education loans, gold loans, personal loans, and Home Loans. The bank has a history of catering to the marginalised class of society. Hence, it is a prominent player in PMAY in Maharashtra, Gujarat, and Karnataka. The controlling institution for Abhyudaya Coop Bank is HUDCO. The bank forwards the subsidy claims under PMAY to HUDCO for sanction and disbursal.

Abhyudaya Coop Bank offers Home Loans for various purposes ranging from construction of a house to takeover of existing loans from other banks. Some of the salient characteristics of Abhyudaya Coop Bank Home Loan are its competitive interest rates and relaxed eligibility norms.

Abhyudaya Cooperative Bank Home Loan Features and Benefits

Purpose

  • Purchase of house/flat or apartment - new and resale
  • Construct your house on a piece of land owned by the borrower
  • Purchase a flat/apartment under construction
  • Extension/Improvement to existing home
  • Balance takeover of existing Home Loan with other banks and housing finance companies.

Target group

  • Salaried individual
  • Self-employed persons including professionals

Quantum of loan

The maximum amount of Home Loan is 70 Lakhs

Margin requirements

  • Up to 28 Lakhs: 10%
  • Above 28 Lakhs: 20%

Repayment tenure

A maximum of 240 months including moratorium of 18 months for houses under construction.

Rate of interest

Competitive rates of interest

Service charges

As applicable

Share linkage

As per bank norms

Abhyudaya Cooperative Bank Home Loan Interest Rate

Abhyudaya Cooperative Bank is a cooperative bank established under the Cooperative Societies Act. It does not qualify as a commercial bank. Hence, it does not subscribe to the MCLR, Base Rate, or RLLR interest rate structure that commercial banks follow. Abhyudaya Cooperative Bank has an independent interest structure linked to its Prime Lending Rate.

The PLR of Abhyudaya Cooperative Bank depends on market fluctuations like the MCLR structure of other banks. Hence, any change in the market rates can influence the Home Loan interest rates payable by individual borrowers.

Abhyudaya Cooperative Bank announces its PLR regularly. The latest such revision is with effect from January 01, 2019. Abhyudaya Cooperative Bank links its Home Loan and other loans interest rates with the PLR by either adding a premium of deducting a discount depending on its priority.

Home Loans form an integral aspect of priority sector finance. Hence, Abhyudaya Cooperative Bank applies a discount on the PLR while determining the Home Loan interest.

The Prime Lending Rate of Abhyudaya Cooperative Bank with effect from January 01, 2019, is 13%.

Home Loan Product Rate Spread Effective rate

Housing Loan

Up to 28 Lakhs

PLR - 4.40%

8.60%

Above 28 Lakhs

 

 

Women borrowers

PLR - 4.30%

8.70%

Other borrowers

PLR - 4.20%

8.80%

Loans for repairs and renovations to an existing borrower - Maximum Loan is 10 Lakhs

PLR - 2%

11%

Loans for repairs and improvements to other borrowers - Maximum Loan is 10 Lakhs

PLR - 1%

12%

Abhyudaya Cooperative Bank Home Loan Interest Rate - Points to Note

  • Abhyudaya Cooperative Bank offers a floating rate of interest on Home Loans
  • The rates change whenever the bank changes its PLR
  • The PLR is linked to market rates
  • PMAY borrowers have the same rate structure

Abhyudaya Cooperative Bank Home Loan - Method of Calculation of Interest

Abhyudaya Cooperative Bank calculates interest on the daily reducing balances like all other commercial banks do. Hence, the borrowers get the benefit of interest on the EMI they pay during the month.

Method of Calculation of EMI

Abhyudaya Cooperative Bank does not have an EMI Calculator on its website. However, customers can use the EMI calculator provided on the MyMoneyMantra site to determine the Home Loan EMI.

  • Access MyMoneyMantra.com
  • Go to Financial Tools
  • Select EMI Calculator
  • Input your loan amount, rate of interest and repayment tenure to get the EMI
  • This calculator helps to determine the break-up of interest and principal repayment portion across the entire loan tenure.

Method of Repayment

Abhyudaya Cooperative Bank account holders can repay their Home Loan in the following manner:

  • Submit post-dated cheques for the EMI amounts
  • Set up a standing instruction authorising the bank to recover your loan EMI
  • Pay cash at the bank branch
  • Use internet banking facility to repay the loan amount

Other bank customers can adopt these ways to repay the Abhyudaya Cooperative Bank Home Loan:

  • Submit PDCs in advance
  • Register for an ECS mandate
  • Pay cash at Abhyudaya Cooperative Bank branches
  • Use their net banking facility and remit the instalment through NEFT/IMPS/RTGS

Abhyudaya Cooperative Bank Home Loan - Different Ways to Apply

There are no facilities to apply or register your interest for a Home Loan online on the Abhyudaya Cooperative Bank website. Thus, the best way to apply for a Home Loan is to visit the bank branch in person.

Abhyudaya Cooperative Bank Home Loan - PMAY

Abhyudaya Cooperative Bank is an active lender in PMAY. PMAY loans are similar to regular Home Loans in many ways. However, there are restrictions concerning the eligibility of the borrowers. Similarly, the entire loan amount is not eligible for the upfront interest subsidy. Various factors decide the subsidy amount.

Eligibility of Borrowers under PMAY

The annual family income of the applicants decides the category to which the borrowers belong. The maximum loan amount eligible for the subsidy also depends on the category to which the borrowers belong.

Category of Borrower Maximum annual family income

Economically Weaker Section - EWS

3 Lakhs

Low-Income Group - LIG

6 Lakhs

Middle-Income Group-I MIG-I

12 Lakhs

Middle-Income Group-II MIG-II

18 Lakhs

The following factors decide the subsidy amount:

Category of borrower EWS/LIG MIG-I MIG-II

Maximum loan amount eligible to get a subsidy

6 Lakhs

9 Lakhs

12 Lakhs

Rate of subsidy

6.50%

4%

3%

Maximum amount of grant

2.67 Lakhs

2.35 Lakhs

2.30 Lakhs

Treatment of PMAY Subsidy

  • PMAY subsidy is an upfront interest subsidy
  • Abhyudaya Cooperative Bank registers its claim for a subsidy with HUDCO, its Central Nodal Agency.
  • On receipt of the grant, it is credited to the Home Loan account immediately
  • As a result, the Home Loan EMI of the borrower reduces considerably

Abhyudaya Cooperative Bank - Home Loan Service Charges

Type of Service Charges Amount of Service Charges

Preliminary sanction letter

500

Processing charges for legal expenses to check the genuineness of title

3,000 per property

Processing charges for Home Loans

0.60% of the loan amount

Processing charges for home repair loans

0.60% of the loan amount

Abhyudaya Cooperative Bank Home Loan - FAQs

How does Abhyudaya Cooperative Bank determine my Home Loan eligibility?

Like all banks, Abhyudaya Cooperative Bank has a well-defined policy for deriving at your Home Loan eligibility. The method is as described hereinbelow:

A - Eligibility depending on Agreement Value (90% of agreement value for loans up to 28 Lakhs and 80% of agreement value for loans above 28 Lakhs).

B - Eligibility as per Repaying Capacity

  • Repayment capacity depends on the minimum take-home pay
  • Minimum take-home pay is equal to 40% of the net income with a minimum of 8,000 and a maximum of 20,000.
  • Repayment Capacity = Net Monthly Income - Minimum take-home pay - Other loan deductions
  • Eligibility = Repayment Capacity X 1,00,000 / EMI for 1,00,000

The individual loan eligibility is the lower of the two calculations, A and B.

What is the repayment tenure in the case of Abhyudaya Cooperative Bank Home Loan?

The repayment tenure in Abhyudaya Cooperative Bank loans is as follows:

  • Fully disbursed Home Loan for direct purchase of a home: 240 months including a one-month moratorium.
  • Loans for property under construction: Holiday period is 18 months, and total repayment should not exceed 240 months including the holiday period.
  • Balance takeover: The maximum repayment tenure is 240 months. If the residual mandate is less than 240 months, the repayment tenure in Abhyudaya Cooperative Bank will vary accordingly.

Is it compulsory to purchase shares of Abhyudaya Cooperative Bank to avail Home Loans?

Yes, it is compulsory to do so. The number of shares depends on the Bank's internal policies.

Do you need to provide sureties for your Abhyudaya Cooperative Bank Home Loan?

Yes, the surety norms are as listed below:

  • Up to 10 Lakhs: No Surety is necessary
  • Above 10 Lakhs: One surety with net income of 30,000 or two sureties with a minimum income of 20,000 each.
  • In the case of Gram Panchayat property: surety is necessary as described above, irrespective of the loan amount.
  • If the housing loan is in joint names with both employed in reputed organizations, no guarantor is required for Home Loans up to 25 Lakhs.
  • All loans above 25 Lakhs need surety as described above

Does Abhyudaya Cooperative Bank charge foreclosure penalty on Home Loans?

No bank or housing finance company can charge foreclosure penalty if the borrower opts for a floating rate of interest. Abhyudaya Cooperative Bank offers a floating rate of interest on Home Loans. Hence, it does not charge any foreclosure penalty on Home Loans.

How does the bank treat my EMI in case of a rate revision?

Abhyudaya Cooperative Bank provides the option to the borrower to decide how to treat the EMI in the case of a rate revision. The borrower should exercise the option at the time of availing the loan. In the absence of an alternative, the bank reserves its right to maintain the EMI constant and change the tenure accordingly.

What is the maximum loan eligibility in the case of a PMAY loan account?

The loan eligibility depends on the income and the repayment capacity of the borrower. The value of the property is also a vital aspect.

There is no connection between the loan eligibility and subsidy eligibility. The subsidy eligibility is defined clearly in the scheme. Any loan amount above the imposed ceiling is an unsubsidised loan.

Does Abhyudaya Bank offer interest rate concessions to women borrowers?

An interest rate concession is available to women borrowers under the following conditions.

  • Loans up to 28 Lakhs: No concession
  • Loans above 28 Lakhs: A concession of 0.10%

This concession is available only if the woman is a co-owner of the property. As a co-owner, she automatically becomes a co-borrower.

Who can be a co-borrower in an Abhyudaya Cooperative Bank Home Loan?

Specific conditions should be satisfied for a person to become a co-borrower.

  • All co-owners of the property automatically become co-borrowers to the Home Loan
  • The ideal co-borrower is the spouse of the applicant. In case the spouse is a working individual, the income of the spouse can also be added to the applicant's income to determine the overall eligibility.
  • Parents can become co-borrowers under specific circumstances. Similarly, a son or a daughter can also become a co-borrower provided they satisfy specific conditions.
  • The bank usually does not accept siblings as co-borrowers unless they are co-owners of the property.

Do you get income tax benefits on the Home Loan principal and interest repayment in the case of Abhyudaya Cooperative Bank Home Loan?

Yes, income tax benefits are permissible/available as per the IT Act. Borrowers can claim a maximum of 2 Lakhs under Sec 24B of the Act for interest repayment. Similarly, the principal repayment amount is eligible for tax concessions under Sec 80C of the Act.

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