The State Bank of India (SBI) has offered central government employees loans with lower interest rates and extended period for repaying the loans.
After accepting the recommendations of the 7th Central Pay Commission (CPC), the NDA government on Saturday stated that salaries for August would include a hike of 23.55 per cent, along with arrears for the last seven months.
The 7th CPC came into effect from January 1, 2016. On Monday, the SBI said it has launched two schemes for central government employees – SBI Privilege Home Loan and the SBI Shaurya Home Loan – having lower EMIs after retirement and flexibility in selecting longer repayment tenures.
Central government employees now have an option to repay home loans up to the age of 75 years, as against 70 at present, with the monthly outgo reducing after the borrower retires from service.
These discounted home loans are also available to all government employees and defence personnels, added SBI.
The SBI also offers full waiver of processing fee and a concession of 0.05 per cent interest rates. Almost 47 lakh Central government employees, including 14 lakh defence personnels, would benefit from this salary hike.
“Benefit of lower interest rate as a concession of 5 bps (0.05 per cent) over the home loan card interest rate is available wherever check-off facility is extended by the government under tie-up arrangement with the bank,” SBI said in a statement.
“The launch of ‘SBI Privilege Home Loan’ and ‘SBI Shaurya Home Loan’ products has been timed with the notification of 7th Pay Commission recommendations. Surplus income can thus be utilised by government employees and defence personnel towards purchase of new/better house,” SBI said.
The SBI has already reduced its marginal cost of lending rate to 9.10 per cent effective August 1, from the earlier 9.15per cent. The Punjab National Bank has also cut its base rate by 0.05 per cent across various tenures. IDBI Bank too reduced its base rate to 9.65 per cent from 9.75 per cent.
The total additional financial impact on the Central government for the current financial year is likely to be Rs 1,02,100 crore, of which the Railways will have to share Rs. 28,450 crore.