The government of Assam has signed a memorandum of understanding (MoU) with Punjab National Bank (PNB) and Assam Gramin Vikas Bank (AGVB) to give housing loans at concessional rates to its regular employees who have completed at least three years of regular service.
According to the agreement, both the banks have agreed to provide home loans to the regular state government employees at interest rates below the prevalent market rates.
According to the media reports, the banks have also agreed to lower their processing fees from 1 percent to 0.25 per cent of the loan amount and also agreed to lend the premium for the compulsory life insurance of the borrowers.
They have also agreed to take over the existing housing loans of willing employees from other banks or the government as per its extant instructions.
The state government, on its part, will ensure that the salaries and terminal benefits will be disbursed through the bank branch sanctioning the housing loan till the loan is fully paid back.
In the event of the untimely death of the borrower, the insurance claim will be adjusted against the outstanding loan amount and thus there will not be any repayment burden on the family.
In August 2007, a similar agreement was signed between the state government and State Bank of India (SBI) for making housing loans affordable for the regular state government employees.