Banks, FIs to disburse home loans to public servants

SM Najmus Sakib | Published: September 25, 2018 09:45:01 | Updated: September 26, 2018 10:47:08


Picture used for illustrative purpose only — Collected

Finance ministry will enter into an agreement with four banks and state-run financial institutions today (Tuesday) to disburse home loans for public servants.

"Housing loan disbursements will take effect next month following Tuesday's agreement with four state entities," said a top official of Bangladesh House Building Finance Corporation (BHBFC).

Finance division and four disbursers BHBFC, Sonali, Rupali and Agrani banks are all set to sign a memorandum of understanding (MoU) to this end.

A circular will be issued after the MoU, BHBFC Managing Director Debasish Chakrabarty told the FE.

About the size of the funds the BHBFC is going to get to run the loan scheme, he said they have yet to get any instruction from the government.

But the size of disbursements would be bigger in the current fiscal year after allocations from the government for housing loans, Mr Chakrabarty added.

The MoU signing ceremony will be held at the ministry in the morning where Finance Minister AMA Muhith is expected to attend as the chief guest.

Managing directors of the banks and the BHBFC will be present at the event, according to a notice issued by the finance division.

The government offers a 20-year repayment period for public servants aged under 56 for buying houses or flats at 10 per cent interest rate.

However, the government will provide 5.0 per cent subsidy to the rate while a loanee will bear the remainder.

Mr Muhith in his budget speech in June announced the low-interest home loans for government employees.

The loan ceiling will be the highest Tk 7.5 million and the lowest Tk 2.0 million as per an employee's grade and job location.

A total of Tk 3.0 billion has been allocated as subsidy from the government in the current fiscal year.

Currently, there are 1.4 million government employees in the country who can enjoy the house building loan.

However, any employee charged with a criminal case will not be eligible for the loan.

Loans will be available for building houses and purchasing ready flats.

To avail the opportunity, a borrower will have to have an account with any of the selected banks.

Loan instalments will start one year after building house and six months after buying a flat.

The installments will be deducted from a borrower's salary per month.

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