AIBOC CIRCULAR NO. 101 DATED 19.07.2010

AIBOC issued its circular No. 101 on improvement in housing and conveyance loan. We are reproducing the same here for our readers.

CIRCULAR NO:101                                                   DATE: 19.07.2010

TO ALL AFFILIATES/MEMBERS:

IMPROVEMENTS IN HOUSING AND CONVEYANCE LOAN

             

Our members are aware that the Confederation had included in their charter of demands the need for improvements in the present Housing Loan and Conveyance Loans, keeping in tune with the increased cost of construction and the price of the 4 wheeler vehicles in the market.  The issue could not be taken to logical end due to paucity of time.  Hence we have to-day sent a communication to the IBA on the subject.  A copy of the same is enclosed.

All our affiliates/members are requested to await further developments in this regard.

With greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

No./1452/217/10                                                              19.07.2010

To,

The Chairman,

The Indian Banks’ Association,

World Trade Centre,

MUMBAI – 400 020.

Dear Sir,

HOUSING AND CONVEYANCE LOANS TO OFFICERS

One of the residual issues under non-monitory category was the revision of the ceilings in respect of the Housing as well as Conveyance Loans to Officers in the Banking Industry, is yet to be sorted out.  The last revision in these category of loans was almost outdated in view of the tremendous escalation in the cost of construction and the increase in the price of the 4 wheeler vehicles to a great extent.

The issue although flagged as an important one in the negotiations on the Charter of Demands submitted by us, in view of the paucity of time, it was decided to take up the issue separately on completion of the agreement on the 2^nd option on Pension as well as Salary Revision. We have been receiving anxious enquiries from our members all over the country that the existing housing loan scheme should be very comprehensively revised on the basis of market rates in order to facilitate them to own their houses. The present ceilings are grossly inadequate and they are compelled to borrow the shortfall at a higher rate of interest.

The issue was an industry level one.  However, due to the steep rise in the cost of construction, the managements of some of the banks through a bipartite settlement have raised the ceiling and also some of the provisions of the terms of the housing loan in order to facilitate their members to go in for owning of their own houses.  The State Bank of India came out with a very comprehensive scheme as per the settlement reached with their Federations to provide relief to officers to meet the escalation in the cost of construction.  Thereafter few other banks also followed suit.  We understand that recently, the Managements of Bank of Baroda, Union Bank of India , Bank of India  and Indian Overseas Bank have also extended similar benefits to their employees through bilateral settlements.

It is in this background, there is an urgent need to review the existing scheme as demanded by the Confederation in their Charter of Demands.  We furnish below the extracts of our Charter of Demands in respect of the Loans schemes that are to be revised.

Loans and Advances:

Housing Loan: The existing ceiling on Housing Loan should be enhanced to Rs. 30 lacs with the repayment period spanning upto 30 years.

Rate of Interest:

Schedule should be fixed in such a way that the officers are not put to hardship with a provision for re-payment from their pension even after their retirement, upto the age of 75 years.

The premium on insurance of loan amount should be met by the banks.

Festival Advance:

An interest free Festival Advance of 3 months’ gross salary should be granted.  The repayment schedule can be extended from 12 months to 18 months.

Conveyance Loan:

The quantum of conveyance loan to all officers to be raised to Rs. 10/- lacs at 2% p.a interest.

Other Loans:

The quantum of clean O.D. should be doubled, at 2% interest p.a.

Education Loan:

The Wards of officers should be eligible for grant of education loans, free of interest during their study period. The loans may be recovered after their employment at 2% p.a.  In view of transferability of officers, lack of priority in central schools etc., IBA should start schools atleast in Metros to ensure uninterrupted education of children of bank officers.

On the death of officer, all loans should be waived.

We therefore request you to kindly take a positive view and consider our demand positively. In case further details and discussions are required we request you to kindly arrange to convene a meeting at an early date to enable us to place our views on the subject for your immediate consideration.

Please treat the matter as urgent.

Thanking you,

Yours faithfully,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY