If you are a senior citizen hoping apply for the new reverse mortgage scheme launched by the National Housing Bank (NHB), which allows for a tie-up between banks and insurance companies to make monthly payments to beneficiaries until death, there might not be too much to choose from in the near future.

Not many banks and insurance companies appear to be keen to offer the product. With more than three months having elapsed since the scheme was launched in October, banks and insurance companies have stayed away from the product with only one tie-up between a bank and an insurance company — Central Bank of India and Star Union Dai-chi Life Insurance — materialising. An NHB official said the market is adopting a ‘wait and watch’ approach and would like to see the response to the first such product that has been put on offer. “Our feedback is that not many new players are coming up with the offering. Most banks and insurers are wanting to see how the Central Bank-Star Union product fares in the market,” the official said.

The official said going forward, more players would like to come up with the product. “The new product is an improvement over the earlier reverse-mortgage scheme through which banks had done business of around Rs 600 crore,” the official added.

Reverse mortgage involves a financial deal where the owner of a residential unit pledges the property to the lender in exchange of a monthly annuity payment. The bank takes possession of the property after the death of the owner or it may be taken over by the person inheriting the property after making the agreed payment to the bank. While the new reverse mortgage loan product will provide a regular income to senior citizens throughout their lives against pledge of their house as an asset, the earlier NHB scheme provided for annuity payment up to a maximum of 20 years by banks.