Govt house loan ceiling to be Tk1cr

Bangladesh House Building Finance Corporation (BHBFC) has proposed the government to double its house loan ceiling, which is currently Tk50 lakh, as construction costs surged in recent years. If raised, the ceiling will be Tk1 crore. BHBFC placed the proposal at a meeting at Finance Division Tuesday with Bank Division Secretary Md Eunusur Rahman in the chair. The meeting decided to reduce interest rate of the house loan to make it competitive in the market.  The interest rates for Dhaka and Chittagong will be reduced to 9.5%-8.5% from existing 10%-12%. Five new house loan products were also placed at the meeting. They include home loans for expatriate Bangladeshis, home loans for rural people and farmers, house development and construction of houses Bank Division sources said the proposal of raising loan ceiling is likely to be approved at another meeting of the Finance Division. Apartment loans for Dhaka and Chittagong areas will be increased to Tk90 lakh from the existing Tk40 lakh with interest rate reduced to 10% from existing 12%. Home loan ceiling of Tongi and Savar areas and in other divisions and district will be increased to Tk40 lakh from Tk30 lakh, according to the proposal. According to official data, the BHBFC provided loans to 687 people as of February 2017. It also canceled 48 home loan proposals for flawed information about land. BHBFC data, the BHBFC earned Tk166 crore in the fiscal year  2015-16, which is about 6% higher than Tk157 crore in FY2014-15. It earned Tk85.6 crore as net profit in the first half of the current fiscal year, sanctioned Tk126 crore, disbursed Tk118 crore and recovered Tk248 crore during the July-December 2016 period. The amount of the classified loan was Tk191 crore, which was 6.35% of total balance in the same period. The Corporation has set a target of recovering Tk583 crore in FY2016-17 while its targets of sanctioning and disbursement are Tk350 crore and Tk300 crore respectively.