In a relief measure that directly impacts Central government employees, the government on Thursday announced the lowering of interest rate for House Building Advance (HBA) which in turn will benefit government employees who wish to construct their own house.
According to a statement issued by Ministry of Housing and Urban Affairs, the rate of interest on HBA has been reduced from existing 8.5 per cent to 7.9 per cent for a period of one year, irrespective of the loan amount of HBA.
This will be with effect from October 1, 2019.
"The HBA is admissible to permanent employees and all those temporary employees also who have rendered 5 years of continuous service," the statement said.
The Ministries or Departments are delegated powers to sanction House Building Advance to their employees in accordance with the HBA rules.
The scheme of HBA to Central Government Employees is aimed as a welfare measure providing assistance to the government employees to construct/acquire house/flats of their own.
Finance Minister Nirmala Sitharaman, while announcing relief measures for the economy last month, announced the lowering of interest rate for HBA.
The government had earlier revised the House Building Advance (HBA) rules for Central government employees incorporating the accepted recommendations of the 7th Pay Commission.
The total amount of advance that a Central government employee can borrow is up to 34 months of the basic pay subject to a maximum of Rs 25 lakh, or cost of the house, or the amount according to repaying capacity, whichever is the least for new construction/purchase of new house/flat.
The HBA amount for expansion of the house is capped at Rs 10 lakh or 34 months of basic pay or cost of the expansion of the house or amount according to repaying capacity, whichever is least.
( With inputs from ANI )