BB enlarges cheap housing loan size
Monday, 13 April 2009
Siddique Islam
The central bank has increased its refinancing fund for low-interest bearing housing loan to Tk 5.0 billion from the existing Tk 3.0 billion with the expansion of the area under the scheme in Dhaka city.
"We've taken such measures to meet the rising demand for the housing loan under the refinancing scheme," Senior Deputy Governor of the Bangladesh Bank (BB) Nazrul Huda told the FE Sunday.
He also said the central bank has relaxed its rules and regulations allowing more areas close to Dhaka City Corporation like Uttar Khan and Dhokhin Khan to provide loans under the scheme.
"The central bank took a decision Sunday allowing inclusion of new areas with a view meeting one of the basic needs of the people, particularly lower and middle income groups," the deputy governor added.
The people, who are living in six city corporations as well as in the municipal areas of Tongi, Savar, Gazipur and Narayanganj, are eligible for such loan facilities, according to the existing provisions.
The BB's board of directors approved the additional allocation in a meeting held at the central bank Thursday last with BB Governor Salehuddin Ahmed in the chair, officials said.
On July 18, 2007, the central bank formed a Tk 3.0 billion fund initially for disbursement over a period of three years.
Under the existing provisions, concerned department of the central bank has been empowered to ensure disbursement of Tk 2.0 billion by the end of June this year.
But the department disbursed Tk 2.18 billion as on March 31 last before the expiry of the two-year period, the officials confirmed.
"We had sought permission from the higher authority of the central bank to increase the size of the fund to help meet the growing demand for the housing sector loans," a BB senior official said.
He also added that major part of the funds was received by the borrowers of Dhaka, Chittagong and Sylhet divisions.
Under the BB's scheme, an applicant having a monthly income upto Tk 50,000 will be entitled for the loan of maximum Tk 2.0 million at 9.0 per cent interest rate for the housing purpose.
The repayment tenure of the loan is 20 years with a maximum grace period of one year.
On May 15 last, the central bank relaxed its regulations slashing interest rates on its housing sector refinancing scheme to nine per cent from 10 per cent aiming to popularise the scheme.
Currently, the central bank is providing 100 per cent refinancing facility instead of the previous 75 per cent to encourage the commercial banks and NBFIs to invest in the sector.
Market operators, however, welcomed the BB's latest moves, saying that would help to reduce pressures on population in the capital for inclusion of new areas nearby areas of the Dhaka City Corporation.
"Mostly lower and middle class income groups will be benefited following allocation of more funds by the central bank under the re-financing scheme," Managing Director of the Industrial and Infrastructure Development Finance Company Limited (IIDFC) Asaduzzaman Khan told the FE.
He also said the demand for such loan has increased gradually due mainly to lower interest rate.
Currently, the banks provide loans to housing sector at interest rates ranging between 11.50 per cent and 16.00 per cent, according to the central bank statisticians.
Meanwhile, 32 commercial banks and NBFIs have already signed agreements with the central bank to disburse the housing loans.
The central bank has increased its refinancing fund for low-interest bearing housing loan to Tk 5.0 billion from the existing Tk 3.0 billion with the expansion of the area under the scheme in Dhaka city.
"We've taken such measures to meet the rising demand for the housing loan under the refinancing scheme," Senior Deputy Governor of the Bangladesh Bank (BB) Nazrul Huda told the FE Sunday.
He also said the central bank has relaxed its rules and regulations allowing more areas close to Dhaka City Corporation like Uttar Khan and Dhokhin Khan to provide loans under the scheme.
"The central bank took a decision Sunday allowing inclusion of new areas with a view meeting one of the basic needs of the people, particularly lower and middle income groups," the deputy governor added.
The people, who are living in six city corporations as well as in the municipal areas of Tongi, Savar, Gazipur and Narayanganj, are eligible for such loan facilities, according to the existing provisions.
The BB's board of directors approved the additional allocation in a meeting held at the central bank Thursday last with BB Governor Salehuddin Ahmed in the chair, officials said.
On July 18, 2007, the central bank formed a Tk 3.0 billion fund initially for disbursement over a period of three years.
Under the existing provisions, concerned department of the central bank has been empowered to ensure disbursement of Tk 2.0 billion by the end of June this year.
But the department disbursed Tk 2.18 billion as on March 31 last before the expiry of the two-year period, the officials confirmed.
"We had sought permission from the higher authority of the central bank to increase the size of the fund to help meet the growing demand for the housing sector loans," a BB senior official said.
He also added that major part of the funds was received by the borrowers of Dhaka, Chittagong and Sylhet divisions.
Under the BB's scheme, an applicant having a monthly income upto Tk 50,000 will be entitled for the loan of maximum Tk 2.0 million at 9.0 per cent interest rate for the housing purpose.
The repayment tenure of the loan is 20 years with a maximum grace period of one year.
On May 15 last, the central bank relaxed its regulations slashing interest rates on its housing sector refinancing scheme to nine per cent from 10 per cent aiming to popularise the scheme.
Currently, the central bank is providing 100 per cent refinancing facility instead of the previous 75 per cent to encourage the commercial banks and NBFIs to invest in the sector.
Market operators, however, welcomed the BB's latest moves, saying that would help to reduce pressures on population in the capital for inclusion of new areas nearby areas of the Dhaka City Corporation.
"Mostly lower and middle class income groups will be benefited following allocation of more funds by the central bank under the re-financing scheme," Managing Director of the Industrial and Infrastructure Development Finance Company Limited (IIDFC) Asaduzzaman Khan told the FE.
He also said the demand for such loan has increased gradually due mainly to lower interest rate.
Currently, the banks provide loans to housing sector at interest rates ranging between 11.50 per cent and 16.00 per cent, according to the central bank statisticians.
Meanwhile, 32 commercial banks and NBFIs have already signed agreements with the central bank to disburse the housing loans.