GOVERNMENT OF INDIA
MINISTRY OF HOUSING AND URBAN AFFAIRS

LOK SABHA

UNSTARRED QUESTION NO. 919
ANSWERED ON FEBRUARY 06, 2020

CONCESSION IN HOME LOAN INTEREST RATES

DR. BHARATI PRAVIN PAWAR
SHRI SADASHIV KISAN LOKHANDE

Will the Minister of HOUSING AND URBAN AFFAIRS be pleased to state:

(a) whether any concession in interest rates on home loans is being provided at Central level to purchase/construct houses in Maharashtra; and

(b) if so, the details thereof and the number of people benefited in this regard in Maharashtra during the last three years?

ANSWER

THE MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF HOUSING AND URBAN AFFAIRS

(SHRI HARDEEP SINGH PURI)

(a) & (b) Yes, Sir. Government is implementing a Credit Linked Subsidy Scheme (CLSS) as one of the components of Pradhan Mantri Awas Yojana (Urban) [PMAY(U)] to provide interest subsidy for housing loans to eligible beneficiaries. The main featuresof CLSS are at Annexure – I. During the last three years 1,46,638 households have availed benefits under CLSS in Maharashtra.

Annexure – I

Annexure for Lok SabhaUnstarred Question No 919 for 06.02.2020

*Loans beyond this limit will be at non-subsidised rates.

The beneficiary, at his/her his discretion can build a house of larger area but interest subsidy would be limited to first Rs. 6 lakh only

Source : loksabha questions

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F.No.5(3)-B(PD)/2016
Government of India
Ministry of Finance
Department of Economic Affairs

New Delhi, the 6th January, 2017

OFFICE MEMORANDUM

Subject:- Loans and Advances by the Central Government – Interest rates and other terms and conditions.

Reference this Ministry’s Office Memorandum F.No.5(3)-B(PD)2015 dated 3rd February, 2016 on the captioned subject.

2. The lending rates, categories and conditions prescribed in the aforesaid Office Memorandum have been reviewed. The revised rates of interest,categories and conditions as given in the Table below, would be applicable from 1st April, 2016 and till the time these are reviewed:

TABLE

The terms and condition and conditions regarding eligibility of loan would remain the same as that of last year. If any specific request comes in future from any other financial institution/CPSE/Autonomous Body/Cooperative, it would be examined by the Budget Division, DEA on merits of that case.

3. The terms, including interest rate of loans to Foreign Governments may be settled in consultation with Budget Division. Terms for on-lending of funds under externally aided projects should be in accordance with the prescribed pattern. In case, deviation is considered necessary, Budget Division should be consulted.

4. The interest rates prescribed above assume timely repayments and interest payments and hence no further rebate in rates is to be allowed for timely payments.

5. OTHER TERMS AND CONDITIONS

(a) The loan sanctioning authority should meticulously follow the instructions contained in General Financial Rules, 2005 (GFR 2005), particularly, rules framed under Chapter 9 (II-LOANS) of
GFR, 2005, while sanctioning loans to various entities as stipulated therein.
(b) The instructions issued from time to time have been reviewed and are set out in the following paragraphs for facility of reference.

6. STATE GOVERNMENTS

In the case of loans to State Governments, the arrangements for payment of annual instalment of principal and interest will be as under:-
(a) Block loans for State Plan Schemes and other Plan loans for Centrally Sponsored Schemes:- These loans when drawn in instalments, will be consolidated and deemed to have been drawn as on 1st October in each year. The maturity period of the loans sanctioned for State Plans is 20 years, repayments being made in 20 annual equal instalments together with interest on the outstanding balance commencing from the following year, subject to consolidation under the award of Twelfth Finance Commission (TFC).

However, fifty per cent of these loans will enjoy a five year initial grace period, after which repayments of these loans will be effected in 15 annual equal instalments. The amounts annually payable(by way of principal and interest) would be recovered in 10 equal monthly instalments commencing 15th June, subject to debt waiver under the award of TFC.

(b) Other Loans:- The terms of repayment of these loans will be as laid down from time to time.

7. PUBLIC SECTOR PROJECTS

(A) For new installations or expansion of existing institutions:

(a) The terms and conditions of loans should be fixed with reference to the financial picture presented in the approved Project Report. (Once the pattern is settled, there should be no change except with the specific concurrence of this Department for reasons to be stated in writing).(b) The capital requirements of a project should include adequate provisions for interest payment on borrowings during the period of construction (as specified in the Project Report). The interest on loans due during the period of construction will be allowed to be capitalised to the extent of the provisions made for this purpose in the approved Project Report. In other words, while interest on loans advanced to an undertaking during the period of construction will be notionally recovered by allowing its capitalisation, the payment of interest should effectively commence after the construction period is over.

(c) The repayment of principal should ordinarily commence one year after the project commences production, the number of instalments being determined with reference to the financial projections and repaying capacity specified in the Project Report. Requests for further moratorium will be considered only in exceptional cases where the Project Report has specified any special circumstances that may necessitate a longer period of moratorium and has indicated clearly what staggering of repayment would be needed over the necessary break period. The period of loans sanctioned against capitalised interest during the period of construction may also be on the same terms and conditions as are applicable to loans provided for financing the project costs.

(d) A suitable period of moratorium subject to a maximum of five years from the date of drawal of the loans may be allowed for the repayment of instalments of principal, having regard to the nature of the project, the stage of construction etc. The period of moratorium should not, however, extend in any case, beyond two years from the date of project going into production, or in the case of programmes of expansion, beyond two years from the date of expanded project coming into operation.

(B) For meeting working capital requirements: The undertakings are expected to obtain their cash credit requirements from the State Bank of India/Nationalised Banks by hypothecating their current assets (such as stock of stores, raw materials, finished goods, work in progress, etc.) and where the entire working capital requirements cannot be raised in this manner by seeking a guarantee from Government. Accordingly, requests from Public Sector Undertakings for funds for meeting working capital requirements should be considered only to the extent the same cannot be had from the State Bank of India/Nationalised Banks.

8. GENERAL

REPAYMENT PERIOD

(A) (i) The period for repayment of loans for all parties other than State Governments should be fixed with due regard to the purpose for which they are advanced and it should be restricted to the minimum possible. Normally, no loan should be granted for a period exceeding 10 years. Where a longer period for repayment is sought, prior concurrence of the Budget Division in this Department will be necessary for fixing the period.
(ii) The repayment of a loan should normally commence from the first anniversary date of its drawal or on expiry of the period of moratorium, as the case may be. The recovery should ordinarily be effected in annual equal instalments of principal.
(iii) The period of repayment of working capital loans should preferably be restricted to two or three years. In no case, however, the period of these loans should exceed 5 years.

(B) Moratorium:

Subject to exceptions made in respect of pubic sector projects, a suitable period of moratorium towards repayment might be agreed to in individual cases having regard to the project for which the loans are to be utilised. However, no moratorium should ordinarily be allowed in respect of interest payment on loans. Ministries/Departments may with the approval of their Financial Advisers allow moratorium on repayment of principal wherever considered necessary upto a maximum period of 2 years.

(C) (i) Repayment before due date:

Any instalment paid before its due date may be taken entirely towards the principal provided it is accompanied by payment towards interest due upto date of actual payment of instalment; if not, the amount of the instalment will first be adjusted towards the interest due for the preceding and current periods and the balance, if any, will alone be applied towards the principal. Where the payment of the instalment is in advance of the due date by 14 days or less, interest for the full period (half year or full year as the case may be) will be payable. If any State Government repays an instalment of a loan which is consolidated as on 1st October, in advance of the due date by more than 14 days the interest.

(ii) Pre-payment premium: Prepayment premium of 0.25% on the loans with residual maturity of less than 10 years and 0.50% for the loans with residual maturity of 10 years and above, shall be charged. The provision does not apply to the loans to State/UT Governments.

(D) Penalty Clause:

The loan sanctions/agreements should invariably include a penalty clause providing for levy of a penal rate of interest in the event of default in repayment of instalment(s) of principal and/or interest. The penal rate of interest should not be less than 2.50% above the normal rate of interest at which a loan is sanctioned.

(E) Defaults in repayment/interest payment:

(i) In the event of a default in repayment of loan/interest payment, the recovery of interest at penal rate may not be waived unless there are special reasons justifying a waiver. However, a decision in this regard will be taken by the Ministry of Finance (Budget Division) on the advise of Financial Adviser. Even in such cases, a minimum of 0.25% should be recovered from the defaulting party as penalty.

(ii) The penal rate of interest is chargeable on the overdue instalments of principal and/or interest from the due date of their payment to the date preceding the date of actual payment.

(iii) Whenever a fresh loan is to be sanctioned to a borrower who has earlier defaulted, the loan sanctioning authority must consider the question of recovery of defaulted dues. All releases to Public Sector Undertakings against budgeted outlays should be made only after adjusting the defaults, if any, pertaining to repayment of loans and interest. If for special and exceptional reasons such adjustments are not possible, specific orders of Secretary (Expenditure) should be obtained through Budget Division, before release of fresh loans, in relaxation of extant orders, in conformity
with this Division circular No.F.2 (190)-B(SD)/91, dated 15.10.1991.

(iv) Any defaults should ab-initio serve as a warning signal to the Ministries/ Departments for which curative action has to be taken immediately.

(v) Ministries/Departments need to critically review the financial position of the borrower, including defaulting CPSUs and wherever possible, should take immediate action to recover the money due to the Government.

(vi) In the case of defaulting CPSUs, there has to be a clear road map for restructuring of these CPSUs, as prolonged approval results in burgeoning of defaults.

(vii)Ministries/Departments are to ensure that these defaults do not become fiscally unsustainable.

(viii) Wherever Ministries/Departments are considering restructuring of a CPSU, it must be ensured that besides equity infusion, funds mobilisation, rescheduling of loans/interest payments, write off of dues, etc. should be formulated holistically. However, no request for waiver/postponement of instalments on any ground whatsoever will be accepted, except in cases of companies referred to BIFR or in respect of those companies which have incurred cash losses for last three years, in conformity with this Division circular No.F.2(165)-B(SD)/94, dated 06.10.1994.

(F) Requests for modification of terms of loans:

(i) Borrowers are required to adhere strictly to the terms settled for loans made to them and modifications of these terms in their favour can be made subsequently only for very special reasons. Requests for modification of terms may relate to increase in the period of a loan or of initial moratorium period towards repayment, or waiver of penal interest or reduction in or waiver of normal rate of interest. The procedure of dealing with requests for waiver of penal interest has already been dealt with in paragraph 8. Cases involving other modifications in repayment terms should be considered in consultation with the Budget Division in this Ministry. In referring such cases, the impact of the modifications on the estimates of repayment/interest which have gone into the Budget and Government’s resources position should be succinctly brought out by the administrative Ministry.

(ii) In examining proposals for modification of the period of the loan, the interest rate at which the loan was sanctioned should also be reviewed. In the case of a loan of which repayment has already commenced the revised rate of interest should be applied ab initio only to the residuary portion of the loan outstanding on the date of extension of its period.

(iii) Requests for waiver of recovery of normal interest (either for a specified period or for the entire period) on a loan which originally sanctioned at normal rate of interest, will attract the provisions of Rule 223 (1) of G.F.R.2005 and should be dealt with accordingly.

(G) Loans sanctioned at concessional rates:

(i) In cases where loans are to be sanctioned at a concessional rate, the instructions contained in Rule 223 (1) of G.F.R.2005 have to be observed. In such cases, payment of subsidy (to cover the concession viz. difference between normal rate and concessional rate) should be made conditional upon prompt repayment of principal and payment of interest thereon by the borrower.

(ii) In cases where loans are sanctioned interest free (e.g. loans to technical educational institutions for construction of hostels) prompt repayment should be made a condition for the grant of interest free loans. That is to say, the sanction letter in such cases should provide that in the event of any default in repayment, interest at rates prescribed by Government from time to time will be chargeable on the loans.

(iii) Similarly, in the case of interest free loans to departmental canteens where subsidy is also provided to meet running expenses, the sanction letter should stipulate that in the event of any default in repayment, the defaulted dues would be recovered out of the subsidy payable.

(H) Miscellaneous: A standard form prescribed for issue of loan sanctions (Appendix-I) should ordinarily be followed.

(i) The date of drawal of a loan by the borrower will be date on which he received cash, cheque or bank draft from the Drawing and Disbursing Officer. It should be ensured that the time lag between the date of obtaining the cash/cheque/bank draft and its disbursement/delivery/despatch to the payee is reduced to the minimum. Where the cheque or bank draft is sent through post, the date of posting should be treated as the date of disbursement of the loan. The Drawing and Disbursing Officer should invariably intimate the date of payment to his Accounts Office to enable the latter to make a suitable note in his records.

(ii) In the case of loans sanctioned to parties other than State and Union Territory and Foreign Governments and Government Servants, the borrower should tender the amounts due on or before the due date, at the New Delhi Office/Main Office of the public sector bank accredited to the Ministry/ Department which sanctions the loan, in cash or by cheque or draft drawn on any scheduled bank in Delhi/New Delhi in favour of the said PSB Branch. The payment should be accompanied by a memorandum or challan in duplicate indicating (a) name of the loan sanctioning Ministry/Department; (b) No. and date of the loan sanction letter and the loan amount sanctioned; (c) amount due for payment separately for interest and principal and the head(s) of account to which the dues are to be credited in the Government Accounts; and (d) due date of payment. The borrower should be asked to tender separate chequ Outstation loanees are required to arrange the dues through their bank ensuring that the memorandum/challan and the cheque/draft reaches the aforesaid PSB Branch in New Delhi by the due date.

(iii) Ministries/Departments are required to keep close watch on timely repayments of loans advanced by them and recovery of interest thereon. Rule 220 (1) (viii) of G.F.R. 2005 provides for a notice to be given to the borrowers a month in advance of the due date of payment of instalment of the principal and/or interest thereon. Such notices may be sent in the form given in Appendix II. The borrower should not however be given any advantage in the event of non-receipt of such a notice. Repayments/interest payments due from the loanees should also be reviewed at least quarterly, and where any default has occurred, a fresh notice should be served on the borrower to arrange payment with penal/higher rate of interest in the form set out in Appendix III.

(iv) Individual cases relating to terms and conditions of loans need not be referred to the Department of Economic Affairs (Budget Division) unless it is proposed to deviate from those laid down in this Office Memorandum.

This issues with the approval of Finance Minister.

sd/-
(Vyasan R)
Deputy Secretary (Budget)

Click to view the order

Authority: www.finmin.nic.in

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Besides, the bank said it will offer loans to these segments without any processing or upfront fee and no documentation charges will be levied on them.

The rate of interest is with effect from October 1, 2016.

The Delhi-based state lender said the objective of the drive — christened as ‘PNB Pride’ — is to “ensure availability of housing and vehicle loan at attractive rates and ensure a house and a car for all government employees”.

For housing loans, the floating interest rate has been fixed at marginal cost of lending rate (MCLR) for one year at 9.3 per cent. For those availing the housing loan on a fixed rate basis, it will be a floating one of interest plus 0.50 per cent (i.e, 9.8 per cent).

For car loan, customers will be charged MCLR of one year plus 0.25 per cent (9.55 per cent) on a floating basis. As for fixed interest rate with a reset clause of 3 years, it will be MCLR of one year plus 0.25 per cent, or 9.55 per cent.

Permanent employees of central and state governments, defence personnel and paramilitary forces will be able to avail of the benefits of lower rates under the PNB Pride scheme.

All other terms and conditions of the existing housing and car loan scheme will be applicable to the borrowers, PNB said.

PTI

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HOUSE BUILDING ADVANCE

General Rules for HBA :-

The advance granted to all permanent Central Government Employees.

The advance granted, who has completed minimum 10 years continuous service.

The advance granted for construction / purchase of house / plot.

The advance granted for purchase of ready-built house / flats.

The advance granted for buying a plot or flat under Co-operative Schemes.

The advance granted for enlarging existing accommodation.

The advance granted for purchase of houses / flats under Self Financing Housing Schemes and Co-operative Group Housing Schemes.

General Conditions for HBA :-

Employees should not have availed of any loan or advance for the purpose from any other Government sources.

Employee or spouse or minor child should not already own a house.

Cost Ceiling :-

Cost of the house (excluding cost of the land) should not exceed 134 times of the Basic Pay, subject to a minimum of Rs.7.5 lakhs and a maximum of Rs.18 lakhs. (If both husband and wife are working central government services, the pay of both of them will be taken into consideration for calculating the cost ceiling).

Sanction Amount :-

The amount of House Building Advance admisssiable for employees is 34 times of the Basic Pay or Rs.7.5 lakhs or cost of the building or repaying capacity, whichever is least.

RATE OF INTEREST :-

(Note: No interest is chargeable beyond the date of retirement / death of the Government Servant.)

(Note: The advances carry interest from the date of payment of the first installment and is calculated on the balance outstanding on the last day of each month.)

Income Tax Rebate for HBA :-

Repayment of Principal sum of H.B.A. is exempt u/s 88 of Income Tax Act.

Exemption for Interest portion of HBA is admissible up to maximum of Rs. 1,50,000/-.

If any individual has drawn House Building Loan from any other financial institution, at the end of the year he should obtain a certificate from that financial institution showing repayment of loan details. In that repayment of Principal sum and Interest portion should be clearly mentioned. Accordingly income tax rebate can be taken on principal sum and interest sum.

Interest is calculated on the balance of HBA outstanding on the last day of the month i.e. on the IBB just like calculation of interest on advance for purchase of conveyance, etc.

Interest on H.B.A. is exempt u/s 24(b) of Income Tax Act.

Family Planning Concession for HBA: –

Concessional interest to Central Government Employees for promoting Small Family Norms. – The rate of interest will be half per cent less for an employee who undergoes sterlization.

The post HOUSE BUILDING ADVANCE for Central Government Employees appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

Reserve Bank of India vide circular DBR.BP.BC.No. 74/08.12.015/2014-15 dated March 5, 2015 on “Housing Loans: Review of Instructions” has allowed banks to add stamp duty, registration and other documentation charges to the cost of the house/dwelling unit for the purpose of calculating Loan to Value (LTV) ratio, in cases where the cost of the house/dwelling unit does not exceed Rs. 10 lakh. This has been done with a view to encourage availability of affordable housing to borrowers from economically.

This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

PIB

The post Loan for Low Cost Houses appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

The following officers and representatives of AIRF attended the meeting:

EDPC-I

5/2006: Avenues of promotion of Senior Supervisor in Scale S-13 to S-14 Group ‘B’ (Gazetted) on railways.

16/2008: Assured Carrier Progression Scheme applicable to Motormen of BCT division of Western Railway.

30/2008: Voluntary Retirement of Drivers and Gangmen.

6/2009: Extra Ordinary Leave in continuation with Maternity Leave taken without production of proper medical certificate.

10/2009: Liberalization in the Safety Related Voluntary Retirement Scheme.

12/2009: Grant of PCO Allowance/Incentive Bonus to technical staff supporting shops/Sections (including CMT/C&M Lab.), Drawing/Design, I.T. Power Supply and Stores etc.) – in Railway Workshops and Production Units- Treating them as part of Inspection, Planning & Planning & Progress wings of PCO.

7/2010: Inclusion of left out categories of the staff working in Railway Hospitals of the Indian Railways for the purview of Hospital Patient Care Allowance.

9/2010: Grant of pay scales of `5000-8000 w.e.f. 01.01.1996 to the Sub-Overseer Mistry/ Supervisor(Works), now Jr. Engineer (Works).

17/2010: Payment of Transport Allowance to the staff living in Ghaziabad (Northern Railway).

27/2010: Implementation of recommendations of VI CPC – Grant of Transport allowance to Railway employees.

3/2011: Revision of rates of Kilometreage Allowance and Allowance in lieu of Kilometreage (ALK).

4/2011: Placement of Pharmacists in the Entry GP of `4200(non-functional grade) on completion of two years service in GP `2800 as well as grant of three MACPs to the Pharmacist category on the Indian Railways.

9/2011: Caretaking Allowance to Hostel Staff and merging of Caretaker posts with Ministerial Staff.

10/2011: Grant of pay scale `5000–8000 (pre–revised)/ PB–II GP `4200 in new pay scales to Tower Wagon Drivers of Electrical Department.

13/2011: Grant of LAP, LHAP and Casual Leave to paramedical staff engaged to work in Railway Hospitals etc. on contract basis.

30/2011: Issue of PPOs and making entry of payment of Medical Allowance to Pensioners/ Family Pensioners.

8/2012: Extension of second chance in the matter of Aptitude Test under LARSGESS Scheme.

18/2012: Payment of Breakdown Overtime Allowance to Mechanical Supervisors(C&W) – Mechanical Department.

32/2012: (A) Wrong implementation of MACP Scheme in IT Cadre.(B) Granting of financial benefit under MACP Scheme to EDP Staff.

40/2012: Earmarking of posts for promotion of Non-Appendix 3 IREM Qualified Accounts Assistants in the merged cadre of Sr. SO(A/Cs) and SO(A/Cs).

Source: http://www.indianrailways.gov.in/railwayboard/uploads/directorate/establishment/E%28LR%29/airf%20lo%2015-02-20.pdf

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As soon as one starts looking out at properties to buy a house, banks start offering home loans. This can be overwhelming at times. Making a choice then largely depends on comparing what competitor banks have to offer. Here is a list, which compares home loan rates by different banks.
For a loan amount up to Rs 30 lakh and the tenure being 15-20 years, the following is on offering.

1. Floating interest rate of 10.15 per cent
This rate is being offered by the following organizations:

SBI ( State Bank of India)
ICICI Bank
HDFC Bank
HSBC Bank
Axis Bank
PNB Housing Finance
DHFL
India Bulls ( Up to Rs 25 lakh)
Citi Bank
Tata Capital Housing Finance Ltd

EMI per lakh works out to be Rs 975.

SBI charges a processing fee of 0.25 per cent of the loan amount up to Rs 25 lakh or minimum Rs 1000. For a loan amount above Rs 25 lakh the processing fee is Rs 3,250. Citibank charges 0.25 per cent of the loan amount. ICICI, HDFC and PNB charge 0.5 per cent of the loan amount as processing fees. However, HDFC has capped the maximum amount to Rs. 10,000. Whereas, Axis Bank and HSBC charge a minimum processing fee of Rs 10,000 or 1 per cent of the total loan amount. DHFL charges Rs 5000 plus document charges and taxes and India Bulls charges Rs 7,500 plus taxes.

2. Floating interest rate of 10.20 per cent
This rate is being offered by the following banks:

Federal Bank
Bank of India
UCO Bank
Canara Bank

The EMI per lakh works out to be Rs 978.

Federal Bank and UCO Bank both charge 0.5 per cent of the loan amount. The minimum amount charged is Rs 3000 and Rs 1500 whereas maximum is Rs 7500 and Rs 15,000 respectively by both the banks. Bank of India has decided to waive off processing fees on new loans sanctioned up to March 2015.

3. Floating interest rate of 10.25 per cent
This rate is being offered by the following lenders:

IDBI
Punjab National Bank
Allahabad Bank
Central Bank of India
Corporation Bank
Union Bank of India
United Bank of India
Bank of Baroda
Oriental Bank of Commerce
Kotak Bank
Dena Bank
First Blue Home Finance
Syndicate Bank
Indian Overseas Bank
State Bank of Travancore
Indian Bank

The EMI per lakh works out to be Rs 982.

IDBI, Punjab National Bank and Oriental Bank of Commerce have NIL processing fees. State Bank of Travancore does not charge any processing fee up to a loan amount of Rs 25,000 and United Bank of India has waived off processing fee for a loan amount up to Rs 75 lakh. Processing fee ranges from 0.25 per cent to 0.5 per cent of the loan amount. Allahabad Bank charges 0.6 per cent of the loan amount with a cap of Rs 12,000 while India Overseas Bank charges 0.58 per cent of the loan amount with a cap of Rs 10,190.

4. Floating interest rate of 10.26-10.30 per cent
Standard Chartered Bank offers 10.26 per cent on home loans with a processing fee of Rs 5500 plus service tax. The EMI works out to be Rs 982.

Vijaya Bank charges 10.30 per cent and the EMI works out to be Rs 985. The processing fee is 0.25 per cent of the loan amount with a cap of Rs 10,000.

5. Floating interest rate of 10.50 per cent and above
Deutsche Bank offers an interest rate of 10.5 per cent and a flat processing fee of Rs 12,000 plus taxes. EMI per lakh works out to be Rs 998.
Bank of Maharashtra offers 10.55 per cent (up to 25 lakh) and 10.75 per cent above that. Accordingly the EMI works out to be Rs 1001 and Rs 1015 respectively. Processing fee is 0.25 per cent of the loan amount subject to maximum of Rs 25,000.
ING Vysya offers 10.75 per cent, the EMI for which works out to Rs 1015. Processing fee is 0.5 per cent of the loan amount.
Development Credit Bank and Dhanalakshmi Bank offer 11.50 per cent and charge a processing fee of 1 per cent. EMI per lakh works out to be Rs 1066.

6. Fixed rates on offer
LIC Housing Finance offers 10.10 per cent (fixed for 2 years)
HDFC Ltd offers 10.15-10.65 per cent (fixed for 2-3 years) and 10.25- 10.75 per cent (fixed for 10 years).
Axis Bank offers 10.40 per cent (fixed for 20 years)

Look out for festive offers when processing fee is waived off and always negotiate for better rates. Request your bank official to share complete details so that there are no surprises in the form of hidden charges, pre-payment charges etc. Also, find out about special rates applicable for self-employed individuals and women.

Hope this compilation helps you in analysing what suits you best.

Data source: deal4loans.com

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Allowance/Advance shall automatically increase by 25% everytime DA goes up by 50% – CGDA’s clarification – no separate order is required for revision of allowances/advances by 25% on the original amount w.e.f. 01.01.2014

Controller General of Defence Accounts
Ulan Batar Road, Palam, Delhi Cantt-110010
No. AN/XIV/6th CPC/Corr./Vol-XII

Dated: 29.04.2014

To
All PCsDA/CsDA

Sub: Enhancement of rates of various allowances by 25% everytime DA payable on the revised pay structure goes up by 50%.

Consequent on revision of rates of Dearness Allowance from existing 90% to 100% vide MoF OM dated 27.03.2014, references are being received in this HQrs office seeking clarification regarding separate orders for revision of rates of certain allowances/advances where a specific clause indicates that the allowance/ advance shall automatically increase by 25% everytime DA payable on the revised pay structure goes up by 50%.

2. The matter has been examined in this HQrs office and it is clarified that automatic revision will take place only in respect of those allowances for which a specific clause of automatic increase has been provided in respective original Govt. orders. Therefore, no separate order is required for revision of allowances/advances by 25% on the original amount w.e.f. 01.01.2014

3. This issues with the approval of Jt. CGDA (AN)

sd/-
(Upendra Kumar)
For CGDA

Source: www.cgda.nic.in
[http://cgda.nic.in/adm/enhancement%20of%20rates%20of%20allowance%20290414.pdf]

The post Allowance/Advance shall automatically increase by 25% everytime DA goes up by 50%: CGDA clarified – No separate order is required appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
LOK SABHA

UNSTARRED QUESTION NO 428

ANSWERED ON 06.12.2013

 TIME LIMIT FOR REPAYMENT OF EDUCATIONAL LOANS

428 . Shri R. THAMARAISELVAN

Will the Minister of FINANCE be pleased to state:-

(a) the existing time limit fixed by the Government/Reserve Bank of India (RBI) for repayment of educational loans taken by students to pursue higher studies abroad;
(b) whether the Government proposes to expand the said time limit; and
(c) if so, the details thereof and the reasons therefor?

ANSWER

(MINISTER OF STATE IN THE MINISTRY OF FINANCE) (SHRI NAMO NARAIN MEENA)

(a) : As per revised Model Education Loan Scheme of Indian Banks’ Association (IBA), the students are allowed repayment period of 10 years for education loans upto Rs 7.50 lakh and 15 years for loans above Rs 7.50 lakh.

Students are allowed repayment holiday/moratorium during course period plus 1 year or 6 months after getting the job which ever is earlier.

(b) & (c) : No such proposal is under consideration of the Government at present.

Source: Lok Sabha
Via: http://karnmk.blogspot.in/2013/12/time-limit-for-repayment-of-educational.html

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F.No.5(3)-B(PD)/2012
Government of India
Ministry of Finance
Department of Economic Affairs

New Delhi, the 7th January, 2013

OFFICE MEMORANDUM

Subject:- Loans and Advances by the Central Government – Interest rates and other terms and conditions.

Reference this Ministry’s Office Memorandum F.No.5(3)-B(PD)2011 dated 19 th March, 2012 on the captioned subject.
2. The lending rates prescribed in the aforesaid Office Memorandum have been reviewed. The revised rates of interest applicable from 1st April 2012 are given in the Table below:—

The rate of interest prescribed for “Other Loans” under sub-para 1 (ii) and 2 (ii) above is also applicable for Additional Central Assistance (ACA) on the un-disbursed amount of the loan/issues for all disaster Reconstructions and Rehabilitation Programme assisted by World Bank & ADB.

The loans to State Electricity Boards, Damodar Valley Corporation under the scheme for renovation and modernisation of thermal power stations would carry interest at the same rate as applicable to ‘Other Loans’ to State Governments. Normally, loans should not be given to Private
Sector Companies. In exceptional cases where such loans become necessary interest should be 1/2% higher than those prescribed for Public Sector.

3. The terms including interest rate of loans to Foreign Governments may be settled in consultation with Budget Division. Terms for on-lending of funds under externally aided projects should be in accordance with the prescribed pattern. In case, deviation is considered necessary, Budget Division should be consulted.

4. The interest rates prescribed above assume timely repayments and interest payments and hence no further rebate in rates is to be allowed for timely payments.
5. OTHER TERMS AND CONDITIONS

The instructions issued from time to time have been reviewed and are set out in the following paragraphs for facility of reference.
6. STATE GOVERNMENTS

In the case of loans to State Governments , the arrangements for payment of annual instalment of principal and interest will be as under:-
(a) Block loans for State Plan Schemes and other Plan loans for Centrally Sponsored Schemes:-

These loans when drawn in installments, will be consolidated and deemed to have been drawn
as on 1st October in each year. The maturity period of the loans sanctioned for State Plans is 20 years, repayments being made in 20 annual equal instalments together with interest on the
outstanding balance commencing from the following year, subject to consolidation under the award of Twelfth Finance Commission (TFC). However, fifty per cent of these loans will enjoy a five year initial grace period, after which repayments of these loans will be effected in 15 annual equal instalments. The amounts annually payable (by way of principal and interest) would be recovered in 10 equal monthly instalments commencing 15th June, subject to debt waiver under the award of TFC.

(b) Other Loans:-

The terms of repayment of these loans will be as laid down from time to time.

7. PUBLIC SECTOR PROJECTS

(A) For new installations or expansion of existing institutions:

(a) The terms and conditions of loans should be fixed with reference to the financial picture presented in the approved Project Report. (Once the pattern is settled, there should be no change except with the specific concurrence of this Department for reasons to be stated in writing).

(b) The capital requirements of a project should include adequate provisions for interest payment on borrowings during the period of construction (as specified in the Project Report). The interest on loans due during the period of construction will be allowed to be capitalised to the extent of the provisions made for this purpose in the approved Project Report. In other words, while interest on loans advanced to an undertaking during the period of construction will be notionally recovered by allowing its capitalisation, the payment of interest should effectively commence after the construction period is over.

(c) The repayment of principal should ordinarily commence one year after the project commences production, the number of instalments being determined with reference to the financial projections and repaying capacity specified in the Project Report. Requests for further moratorium will be considered only in exceptional cases where the Project Report has
specified any special circumstances that may necessitate a longer period of moratorium and has indicated clearly what staggering of repayment would be needed over the necessary break period. The period of loans sanctioned against capitalised interest during the period of construction may also be on the same terms and conditions as are applicable to loans provided for financing the project costs.

(d) A suitable period of moratorium subject to a maximum of five years from the date of drawal of the loans may be allowed for the repayment of instalments of principal, having regard to the
nature of the project, the stage of construction etc. The period of moratorium should not, however, extend in any case, beyond two years from the date of project going into production, or in the case of programmes of expansion, beyond two years from the date of expanded project coming into operation.

(B) For meeting working capital requirements:

The undertakings are expected to obtain their cash credit requirements from the State Bank of India/Nationalised Banks by hypothecating their current assets (such as stock of stores, raw materials, finished goods, work in progress, etc.) and where the entire working capital requirements cannot be raised in this manner by seeking a guarantee from Government. Accordingly, requests from Public Sector Undertakings for funds for meeting working capital
requirements should be considered only to the extent the same cannot be had from the State Bank of India/Nationalised Banks.

8. GENERAL REPAYMENT PERIOD

(A) (i) The period for repayment of loans for all parties other than State Governments should be fixed with due regard to the purpose for which they are advanced and it should be restricted to the minimum possible. Normally, no loan shouldbe granted for a period exceeding 10 years.
Where a longer period for repayment is sought, prior concurrence of the Budget Division in this Department will be necessary for fixing the period.

(ii) The repayment of a loan should normally commence from the first anniversary date of its  drawal or on expiry of the period of moratorium, as the case may be. The recovery should ordinarily be effected in annual equal instalments of principal.
(iii) The period of repayment of working capital loans should preferably be restricted to two or three years. In no case, however, the period of these loans should exceed 5 years.
(B) Moratorium : Subject to exceptions made in respect of pubic sector projects, a suitable period of moratorium towards repayment might be agreed to in individual cases having regard to the project for which the loans are to be utilised. However, no moratorium should ordinarily be allowed in respect of interest payment on loans. Ministries/Departments may with the approval of their Financial Advisers allow moratorium on repayment of principal wherever
considered necessary upto a maximum period of 2 years.

(C) (i) Repayment before due date: Any instalment paid before its due date may be taken  entirely towards the principal provided it is accompanied by payment towards interest due upto date of actual payment of instalment; if not, the amount of the instalment will first be adjusted towards the interest due for the preceding and current periods and the balance, if any, will alone be applied towards the principal. Where the payment of the instalment is in advance of the due date by 14 days or less, interest for the full period (half year or full year as the case may be) will be payable. If any State Government repays an instalment of a loan which is consolidated as on 1st October, in advance of the due date by more than 14 days the interest will be payable with
reference to the actual date of repayment.

(ii) Pre-payment premium: Prepayment premium of 0.25% on the loans with residual  maturity of less than 10 years and 0.50% for the loans with residual maturity of 10 years and
above, shall be charged. The provision does not apply to the loans to State/UT Governments.

(D) Penalty Clause: The loan sanctions/agreements should invariably include a penalty clause providing for levy of a penal rate of interest in the event of default in repayment of instalment(s) of principal and/or interest. The penal rate of interest should not be less than 2.50% above the normal rate of interest at which a loan is sanctioned.

(E) Defaults in repayment/interest payment: (i) In the event of a default in repayment of loan/interest payment, the recovery of interest at penal rate may not be waived unless there are special reasons justifying a waiver. However, a decision in this regard will be taken by the Ministry of Finance (Budget Division) on the advise of Financial Adviser. Even in such cases, a minimum of 0.25% should be recovered from the defaulting party as penalty.

(ii) The penal rate of interest is chargeable on the overdue instalments of principal and/or   interest from the due date of their payment to the date preceding the date of actual payment.

(iii) Whenever a fresh loan is to be sanctioned to a borrower who has earlier defaulted, the loan sanctioning authority must consider the question of recovery of defaulted dues. All releases to Public Sector Undertakings against budgeted outlays should be made only after adjusting the
defaults, if any, pertaining to repayment of loans and interest. If for special and exceptional reasons such adjustments are not possible, specific orders of Secretary (Expenditure) should be obtained through Budget Division, before release of fresh loans, in relaxation of extant orders, in conformity with this Division circular No.F.2 (190)-B(SD)/91, dated 15.10.1991.

However, no request for waiver/postponement of instalments on any ground whatsoever will be accepted,except in cases of companies referred to BIFR or in respect of those companies which have incurred cash losses for last three years, in conformity with this Division circular
No.F.2(165)-B(SD)/94, dated 06.10.1994.

(F) Requests for modification of terms of loans: (i) Borrowers are required to adhere strictly to the terms settled for loans made to them and modifications of these terms in their favour can be made subsequently only for very special reasons. Requests for modification of terms may relate to increase in the period of a loan or of initial moratorium period towards repayment, or waiver of penal interest or reduction in or waiver of normal rate of interest. The procedure of dealing with requests for waiver of penal interest has already been dealt with in paragraph 8. Cases involving other modifications in repayment terms should be considered in
consultation with the Budget Division in this Ministry.

In referring such cases, the impact of the modifications on the estimates of repayment/interest which have gone into the Budget and Government’s resources position should be succinctly brought out by the administrative Ministry.

(ii) In examining proposals for modification of the period of the loan, the interest rate at which the loan was sanctioned should also be reviewed. In the case of a loan of which repayment has already commenced the revised rate of interest should be applied ab initio only to the residuary portion of the loan outstanding on the date of extension of its period.

(iii) Requests for waiver of recovery of normal interest (either) or a specified period or for the entire period) on a loan which originally sanctioned at normal rate of interest,will attract the provisions of Rule 223 (1) of G.F.R. 2005 and should be dealt with accordingly.

(G) Loans sanctioned at concessional rates:

(i) In cases where loans are to be sanctioned at a concessional rate, the instructions contained in Rule 223 (1) of G.F.R. 2005 have to be observed. In such cases, payment of subsidy (to cover the concession viz. difference between normal rate and concessional rate) should be made conditional upon prompt repayment of principal and payment of interest thereon by
the borrower.

(ii) In cases where loans are sanctioned interest free (e.g. loans to technical educational institutions for construction of hostels) prompt repayment should be made a condition for the grant of interest free loans. That is to say, the sanction letter in such cases should provide that in the event of any default in repayment, interest at rates prescribed by Government from time to time will be chargeable on the loans.

(iii) Similarly, in the case of interest free loans to departmental canteens where subsidy is also provided to meet running expenses, the sanction letter should stipulate that in the event
of any default in repayment, the defaulted dues would be recovered out of the subsidy payable.

(H) Miscellaneous: A standard form prescribed for issue of loan sanctions (Appendix-I) should ordinarily be followed.

(i) The date of drawal of a loan by the borrower will be date on which he received cash, cheque or bank draft from the Drawing and Disbursing Officer. It should be ensured that the time lag between the date of obtaining the cash/cheque/ bank draft and its disbursement/delivery  despatch to the payee is reduced to the minimum. Where the cheque or bank draft is sent through post, the date of posting should be treated as the date of disbursement of the loan. The Drawing and Disbursing Officer should invariably intimate the date of  payment to his Accounts Office to enable the latter to make a suitable note in his records.

(ii) In the case of loans sanctioned to parties other than State and Union Territory and Foreign Governments and Government Servants, the borrower should tender the amounts due on or before the due date, at the New Delhi Office/Main Office of the public sector bank accredited to the Ministry/ Department which sanctions the loan, in cash or by cheque or draft drawn on any scheduled bank in Delhi/New Delhi in favour of the said PSB Branch. The payment should be accompanied by a memorandum or challan in duplicate indicating (a) name of the loan sanctioning Ministry/Department; (b) No. and date of the loan sanction letter and the loan amount sanctioned;

(c) amount due for payment separately for interest and principal and the head(s) of account to which the dues are to be credited in the Government Accounts; and (d) due date of payment. The borrower should be asked to tender separate cheques/drafts and challans for payment of principal and interest.Outstation loanees are required to arrange the dues through their bank ensuring that the memorandum/challan and the cheque/draft reaches the aforesaid PSB Branch in New Delhi by the due date.

(iii) Ministries/Departments are required to keep close watch on timely repayments of loans  advanced by them and recovery of interest thereon. Rule 220 (1) (viii) of G.F.R. 2005 provides for a notice to be given to the borrowers a month in advance of the due date of payment of  instalment of the principal and/or interest thereon. Such notices may be sent in the form given in Appendix II. The borrower should not however be given any advantage in the event of non-receipt of such a notice. Repayments/interest payments due from the loanees should also be reviewed at least quarterly, and where any  default has occurred, a fresh notice should be served on the borrower to arrange payment with penal/higher rate of interest in the form set out in Appendix III.

(iv) Individual cases relating to terms and conditions of loans need not be referred to the  Department of Economic Affairs (Budget Division) unless it is proposed to deviate from those laid down in this Office Memorandum.

(Peeyush Kumar)
Director (Budget)
Tel. No. 23092744

Source: finmin

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