Haryana govt to empower banks to give loans to its employees

first_imgChandigarh, Mar 2 (PTI) The Haryana government will sign a Memorandum of Understanding with banks to facilitate loans to government employees to tide over the fund crunch which makes extending loans difficult.The state government which provided loans for housing, vehicles, computers and marriage etc to its employees, has decided to transfer the facility to the banks.”The cabinet decided to shift its portfolio to the banks. The State Government would sign an MoU with banks, which would ensure quick release of loans as and when required,” an official spokesperson said today after a cabinet meeting presided over by Chief Minister Manohar Lal Khattar.”The employees would now be able to avail the loans through scheduled banks at the same rate of interest as is applicable through the government. Also, now they will not have to wait for days to get their applications processed,” he said.It was observed that as a result of this decision, the cost of interest subvention would be reduced and there would be wide and fair competition between banks, he said.”There would be good and favourable terms and conditions for the employees. Also, there would be strict time limits upon forwarding of an employees loan application by Head of the Department or Managing Director or Administrative Secretary concerned. There would be quick release of documents and easy pre-payment terms,” he said.”The governments annual budgetary allocation does not suffice the need of all its employees. Therefore, there is discontent among them.”The decision would overcome discontent amongst the employees as all of them would be able to avail the facility. The amount of loan currently given can be diverted to developmental works,” the spokesperson said.advertisementAlso, the shift would increase the clients of the banks, he said.The rate at which the loan is provided to the employees is linked to the rate of interest applicable to Public Provident Fund (PPF) and is revised by the state government from time to time.He said as the banks might be charging a rate of interest higher than that linked to the PPF account, the state would provide interest subvention to the banks on account of differential between the prevailing rate of interest and the one to be charged by the banks.The state government would have to make budgetary allocation only to the tune of a maximum of three per cent of the existing allocated budget on account of interest subvention to be paid to the banks, he said.There are over 2.74 lakh government employees, out of whom only 24,507 have availed housing loan and 9,757 took vehicle loan. As many as 7,144 employees have taken computer loan and 16,887 marriage loan from the government till March 31, 2014. PTI AKA DIP SK DIPlast_img

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