The government has taken initiative to provide low-interest home loans for government employees. According to a report of the finance ministry, the loans will be provided through the usual bank system as the government would not initiate any specific fund for the facility.
Currently the government provides only Tk 120,000 with 1.2 per cent interest rate as home loan to its employees since the rule was implemented in 1982.
A committee appointed to fix the ceiling and the rate of interest prepared the report. Additional secretary ARM Nazmus Sakib of the finance division headed the committee.
According to the report, the interest rate on home loan has been proposed at 5 per cent for government employees while it is 8.5 per cent for others. The remaining 3.5 per cent will be subsidised by the government.
The report further said government will need Tk 7billion to Tk 9.8billion as subsidy if 50,000 to 70,000 loan applications are approved every year.
The report also proposed to divide 20 grades for government employees into five groups for the loan facility.
Grade-5 government employees or above will be in the first group. They will get highest loan of Tk 75,00,000 to build houses or buy flats in Dhaka, other city corporations, and in the divisional headquarters of the country.
The report also said this group of employees will also get loans of Tk 60,00,000 each if they build houses in the district headquarters and loans of Tk 50,00,000 each if outside district headquarters.
The fifth group will have facilities for the employees under grade 18 to grade 20. They will get loans of Tk 30,00,000 each to build house in Dhaka, Tk, 25,00,000 in district towns and loan of Tk 20,00,000 for the other areas of the country.
The report said currently there are 700,000 government employees who will be in service for the next 15 years. The applicants will be 70,000, every year, if 10 per cent of them get approval for the loan facility. The total loan every year will be Tk 280 billion if the loan averages Tk 40,00,000 per person depending on the area of their residence.
The yearly interest of 8.5 per cent on Tk 280 billion will be Tk 23.8 billion. The loan seekers will pay Tk14 billion of it and the remaining Tk 9.8billion will be paid by the government as subsidy from the budget.
The report also mentioned relations between banks and developers. It said, concerned banks should have an agreement with the finance department of the finance ministry. Then a tripartite agreement should take place with the loan seeker.
The tripartite agreement will have clauses like, the building should be constructed following the building code of the government, and development company should be a member of the Real Estate & Housing Association of Bangladesh (REHAB). The property papers from the development company should be kept with the bank as mortgage.
The report also said the developer should hand over the flat within six months of loan approval and full payment. The monthly installment should start after six months of the loan approval.
Finance ministry officials said the government would not be too involved with the issue and this would indirectly curb corruption.
Finance secretary Hedayatullah Al Mamun told Prothom Alo, “We’re experimenting further on the issue.”