Banks, housing to benefit from govt home loan policy

The two sectors are not in a good shape, but will overcome the situation if around 2.1 million civil servants invest their loans there, he said, requesting anonymity. The government hopes that corruption among public servants will drop significantly if they own an apartment when they retire. Sources in Finance Division said that a committee formed in August last year will recommend 8% interest rate on the loan, 3% will be interest subsidy and the loanees will repay the rest. “The total interest subsidy will be Tk800 cr,” the official told the Dhaka Tribune, claiming that,the county’s banking sector currently has idle money worth Tk 1,20,000cr. Bangladesh Bank officials and staff are entitled to 5% interest rate on their home loans against their basic salaries and provident funds. Sources in the Finance Ministry said that the proposed home loan may have a ceiling of Tk10lakh for districts and rural areas, and Tk50lakh for Dhaka and other cities. Farashuddin Pay Commission had recommended a new home loan policy back in December 2015, which is yet two be finalised. When contacted, Rehab Vice President Liaqat Ali Bhuiyan said: “If the government  provides land at low price, realtors will offer 600-700 sft flats at up to Tk20lakh to civil servants.” He suggested that the idle money in the banks be used for building the state employees’ homes. Another Finance Division official linked to the process, also requesting not to be named, said that two sub-committees will submit their reports by March 31 and they were working full swing. Finance Division’s final report will be submitted to the concerned cabinet committee for its consent to implement the policy. Finance Secretary Hedayet Ullah Al Mamun said that he was trying hard to finalise the policy alongside the Sovereign Wealth Fund Act and separate public servant pension fund as top priority. The Public Works Ministry has already sent a proposal of Tk500 crore to the Planning Commission for providing loan to public servants to buy flats. According to Finance Division, there are currently 477,000 first class officers, 131,000 second class employees, 1.228 million third class and 267,000 fourth class.