HBA

The government has issued detailed guidelines regarding housing loan to government employees, from any Public sector or  Scheduled bank or NBFC

Introduction

Employees eligible under the HBA scheme and who have not previously availed of House Building Advance benefit from Government, may directly approach any scheduled commercial bank having operations in Kerala to avail housing finance, as per the concerned bank's criteria and applicable sanction process. Government would provide an interest subvention directly to the employees availing the loan as detailed given below.

Loan Amount

The maximum amount of loan eligible for interest subvention shall be restricted at 50 times of basic pay of employees subject to maximum of Rs.20 lakhs. The loan should be taken from any Scheduled Commercial Banks/NBFCs. Employees intending to avail house building loans from scheduled Commercial Banks/NBFCs with Government interest subvention shall take an NOC from Government (Finance Department) through concerned DDOs.

In case they apply for a higher amount of loan than the maximum eligible limit of House Building Advance, the benefit availed from Government would be restricted to the 'maximum eligible House Building Advance as per existing rules. In case they apply for a lower loan amount than the eligible House Building Advance, the benefit would be limited to the actual loan amount sanctioned / availed from the bank.

Criteria

The criteria shall be first come first served with a weightage for the service left. In case of remaining service, the same parameter as currently followed in HBA regime, shall be continued; This process shall be administered through a dedicated software and shall be issued with in two months from the date of application. DDOs shall be allowed to take the certified print out of the NOC and they shall record it in the service details. On availing the loan, the DDOs concerned shall intimate the Government (Finance Department) and SPARK the details of loans including the EMI through the dedicated software.

Loan Repayment

The maximum tenor of the loan would be restricted to that permissible under current HBA rules and Government would not provide interest subvention or be liable for deducting EMIs for a loan taken for any tenor longer than that permitted under its HBA rules.

When the loan is sanctioned and disbursed by the bank to the employee, a copy of the sanction letter should be given to the Government directly by the sanctioning bank and the concerned employee should submit a letter of consent to Government for deducting the EMI as per the schedule proposed by the bank, directly from each month's salary before crediting the same through the payroll. The concerned bank would be responsible for informing Government from time to time of any changes in the EMI schedule and ensuring employees give their consent to the same. Either the employee or the bank concerned may submit intention to terminate the deductions at any time with at least two months' notice and the same must have been approved by the bank under its foreclosure or other norms.

Government would in turn apply an interest subvention of 3.25% per annum (simple interest) on the Principal, loan amount sanctioned or maximum eligible amount as per HBA rules (whichever is lower). This 3.25% interest subvention is arrived at as the difference between present SBI MCLR (8.25%) and the effective rate of interest being currently charged on HBA (approximately 5.0%). No other processing charges or bar. related fees would paid by the Government and the employee should settle the same directly with the bank concerned.

The annual interest subvention thus calculated would be divided into 12 equal monthly credits and added back to the monthly salary before disbursing the same through the payroll system. Government would be responsible for deducting the EMI specified by the bank from the employees' salary on a monthly basis, while at the same time crediting back the interest subvention into the employee's salary account to net off the benefit payable to the employee.

The Finance Department shall calculate the eligible interest subsidy and credit it in to the salary accounts of the loanee employee along with salary. The EMI shall be deducted from the salary account of the employee and credited to the concerned bank. The bank would directly deduct EMIs from salary accounts of the employees. Government would pay the admissible interest subvention along with the salary payment on a quarterly basis into the specified salary account. For this purpose, the employees would intimate their salary account details to their respective DPO and the bank concerned would inform Government of sanctioned amount details along with start date and end date of EMI deduction Irrespective of any future EMI amount variations. Government would deduct the EMIs chargeable each month from the salary before paying it to the employee. The concerned bank would invoice the Government every month and the total amount of EMIs recovered from the employee's salary would be paid by the Government into the centralized account of each bank as per their respective invoice. Thereafter, the concerned bank should re-appropriate the EMI amounts against each individual employee's loan account with the bank to maintain the repayment schedules on a regular basis. It would be the employee's responsibility to ensure his/ her loan account is always maintained in a regular / standard status at the sanctioning bank.

HBA section of the Finance Department – 0471 2518898.