HBA scheme for Government Employees in Kerala shifted to Banks
Kerala State Government employees will have to approach scheduled commercial banks/ NBFCs functioning in the state to avail of House Building Advance (HBA scheme) hereafter. So far, the loans under House Building Advance at concessional rate of around 5% were being extended by the Government itself. The decision has been announced vide order FINANCE (HBA) DEPARTMENT G.O(P) No. 105/20 18/Fin Dated, 05.07.2018. The announcement came after assessing the prevailing fiscal position of the state.
The employees who are eligible under HBA scheme can directly approach any branch of the scheduled commercial bank/NBFCs operating in the state for the housing loan. Employees who intend to avail House Building Advance from scheduled commercial banks with Government interest subvention shall obtain an NOC from Government (Finance Department) through concerned DDO (Drawing & Disbursing Officer). Sanctioning of the loan will be subject to the norms as applicable to the bank. The employees will continue to avail the concession in interest by way of interest subvention.
The interest subvention on the housing loans availed of by employees will be limited to maximum eligible House Building Advance (HBA scheme) applicable to the employee or the actual amount availed of as housing loan whichever is lower. The employees may avail higher amount of loan if they are otherwise eligible for the same as per the bank’s norm. However, interest subvention will be subject to the above norms. Maximum tenor of the loan also shall be that applicable under HBA rules and Kerala Government will not provide interest subvention or facilitate EMI reduction beyond eligible tenure.
The bank sanctioning the loan shall forward a copy of sanction order to the Government directly and the employee concerned shall submit the consent for deduction of EMI from monthly salary. Government while disbursing the salary will deduct the EMI and remit the amount to the bank concerned. In case of foreclosure of loan the employee or bank shall inform the Government for discontinuation of EMI deduction.
The employees will be entitled to an interest subvention of 3.25% per annum (simple interest) on the principal amount sanctioned subject to the maximum eligible ceiling under HBA scheme rules. The interest subvention rate is arrived by comparing the MCLR of SBI (8.25%) and the effective rate of interest applicable to HBA scheme (5%). The Government will not, however, reimburse processing fee or any other charges levied by the bank and banks will have to collect it directly from the employee concerned
The eligible annual interest subvention will be divided into 12 equal monthly potions and will be included in the monthly salary of the employee. The EMI applicable to loan will be debited from salary. EMIs recovered from the employees based on the monthly invoice submitted by the bank will be remitted to the centralized pool account of each bank. Bank shall adjust the amount towards respective accounts. Employees shall be responsible to maintain the standard status of accounts with the bank. HBA Scheme of Kerala State- Loans Sanctioned from 2009-10
