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Cabinet orders reform of govt home loan policy

  • Published at 12:47 am May 4th, 2017
Cabinet orders reform of govt home loan policy
As the finance ministry has consistently failed to prepare a fresh home and car loan policy for government officials over the past 10 years, the Cabinet Division has stepped in and formed a committee to look into the matter, said a Cabinet official. “It is unfortunate for civil servants that not only has the policy not been updated in 10 years, the amount of funds allocated for home and car loans has also not changed in about 20 years,” said a top official of the Cabinet Division, requesting anonymity. He added that talks of forming a committee had been brought up at the last deputy commissioners’ coordination meeting, where they also discussed how impossible it is to attempt to buy a house and a car with Tk1.20 lakh and Tk60,000, respectively. The Cabinet had accordingly formed a seven member committee to make recommendations for a change in the loan amount and to prepare new guidelines for the home and car loan process. The committee will be led by the Cabinet Division Secretary (Coordination and Reform) and will include the additional secretary of the Cabinet Division, the Dhaka deputy commissioner, representatives from the ministries of public administration, finance and public works and the joint secretary of the Cabinet Division. According to a circular recently sent out by the Cabinet Division, the government will soon provide interest-free loans or limited-interest loans to the civil servants. The last time the home and car loan for government officials was appraised was in 1996. At the time, the government had set the home and car loans at Tk1.20 lakh for 36 months and Tk60,000 for 12 months, respectively. In December 2015, the government formed the Farashuddin Pay Commission which had then recommended that a new home loan policy be created. Last year, civil servants put forward a demanded to have the home loans increased to Tk50-60 lakh for those living in Dhaka and other metropolitan areas. Six months ago a government committee was formed by Finance Division Additional Secretary Najmul Sakib. In its first meeting on January 6, two sub-committees were formed to look for sources of funds and deliberate on a revised ceiling for the home loan policy. When questioned about the lack of progress, a finance ministry official said: “Our home loan facilities have not improved because the additional secretary of the finance division has consistently blocked every proposal for the last ten years.”