BB board sends back housing refinancing scheme for improvement

FE Team | Published: July 05, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The board of directors of the Bangladesh Bank (BB) reviewed Wednesday the refinancing scheme for housing sector and sent back the same to the authorities concerned for further improvement.
The board meeting chaired by the BB Governor Salehuddin Ahmed showed interest in the scheme but wanted incorporation of a few specific proposals, particularly on the size of house or apartment and amount of loan.
A proposal was placed to the board for approval of Tk 3.0 billion as initial fund for the scheme.
A high-powered committee earlier submitted their report on refinancing scheme for the housing sector to the authorities concerned for taking necessary measures.
Under the scheme, people belonging to the lower middle class as well as the middle class will be able to purchase new apartments or construct dwelling houses of maximum 1100 square feet each with financial support.
An applicant will be entitled to receive the maximum amount of Tk 1.20 million for the housing purpose, according to the proposed scheme.
Sources, however, said a board member raised questions about the maximum amount of loan and the maximum size of apartment or house. It would not be proper to limit the size of apartments or houses clients, he felt and suggested review of the maximum ceiling of loan.
The committee will come up with the proposal again with necessary amendments for consideration by the board some time this month.
"We are ready to start the scheme after getting approval by the board," a BB senior official told the FE, adding that the interested clients will be able to receive such loan facilities within a couple of months after necessary approval by the board.
According to the original scheme, the maximum repayment period of loan is 16 years with one-year grace period. The rate of interest on such loan is 10 per cent, which will be calculated on a quarterly basis.
But there will be a mandatory provision for receiving the loan, that is, an applicant must have a maximum monthly gross income of Tk 30,000.
Any commercial bank or non-banking financial institution (NBFIs), which will disburse the loan under the scheme, will receive 67 per cent of the disbursed amount from the central bank as refinancing facilities, and the remaining 33 per cent will have to be met by the bank or NBFI from their own funds.