The government is hurriedly opening a window at the Ministry of Finance for dealing with government employees' home loan issues.
The window is required to facilitate the first-ever home loans for the government employees-both on cadre and non-cadre services.
The loan activities are set to be launched from early next month, according to officials at the finance division.
The employees of the autonomous organisations and judicial officers are not eligible for the loans, the maximum size of which will be upto Tk 7.5 million.
The window, a permanent one, will operate under the ministry of finance. It may be named 'government employees' house loan management branch'.
While talking to the FE, a senior finance division official told the FE that this office will be ready for operation within the next few days.
"We're in hurry as it is important to handle the loans, which will be processed from October next," he said.
If the authorities fail to open a separate office by early next month, the designated officials may be asked to use any of the units under the MoF as their temporary office, he said.
"We would like to start loan operations from October 01. For this reason we are hurriedly opening the new branch," said the official.
In addition to the government's house building finance corporation, the office will work with four state-owned commercial banks.
The government this week signed a memorandum of understandings (MoUs) with Sonali, Janata, Agrani and Rupali and Bangladesh House Building Finance Corporation (BHBFC) to provide low-cost home loans to the government employees.
Additional secretary of the finance division Dr Md Jafar Uddin signed the deal on behalf of the ministry.
Under the deal, four banks and the corporation will provide the government employees with house loan at 5.0 per cent interest rate. The government will pay the financial institutions the rest as interest subsidies based on the market rate.
The home loan will range from Tk 2.0 million and Tk 7.5 million, and the borrowers will have to repay the money in 20 years.
In the first year, Tk 3.0 billion to Tk 4.0 billion will be needed to provide loan to the government employees.
Officials said if the government pays Tk 9.0 billion as subsidies, some 200,000 employees will be able to get the subsidised loan each year.
In the meantime, a section of government officials involved with policy preparations, told the FE that this loan facility will stimulate the country's real estate sector, which has remained sluggish slump for many years.
They note that many flats remained uncompleted for lack of customers and this loan facility will help generate funds.
"You will see many housing projects have remained uncompleted for long as they lack of customers and therefore funds, this will help generate funds for them and expedite the housing industry," a senior official at the finance division told the FE on Thursday.
The number of civil servants in the country is around 1.1 million upto June last.
