BB's housing loan scheme gets good response
Wednesday, 25 March 2009
Siddique Islam
The demand for low-interest bearing housing loan under the refinancing scheme of the central bank has been rising gradually following relaxation of rules and regulations and reduction of rate of interest.
Around Tk 2.0 billion has already been disbursed by 20 banks and non-banking financial institutions (NBFIs) from the Tk 3.0 billion fund, the central bank officials said.
"We'll have to seek permission to allow disbursement of Tk 1.0 billion before the second year closes in June '09," a senior official of the Bangladesh Bank (BB) told the FE Tuesday.
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 most part of the targeted fund has been disbursed before the expiry of the two-year period," the BB official said, adding that the BB's department concerned will have to take permission from the higher authorities before disbursing the remaining amount, Tk 1.0 billion.
"We disbursed around Tk 200 million per month at 5.0 per cent interest rate to the banks and NBFIs under such refinancing scheme," another BB official told the FE.
He also said major part of the funds were received by the borrowers of Dhaka, Chittagong and Sylhet divisions.
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.
Among the banks and NBFI's, the Delta Brac Housing Finance Corporation Limited, generally known as DBH, has topped the list disbursing around Tk 1.0 billion of the fund, the BB official added.
"We're able to provide funds to our clients within 20 working days of their request after verifying all the relevant documents," Assistant Manager of the DBH Mir Mukhlesur Rahman told the FE Tuesday.
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.
"The demand for such loan has increased gradually due mainly to lower interest rate," Managing Director of the Industrial and Infrastructure Development Finance Company Limited (IIDFC) Asaduzzaman Khan told the FE.
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.
He also said the IIDFC has given priority to sanctioning the loan to service holders, including professionals like doctors and engineers, who are able to repay the credit on time.
Meanwhile, 32 commercial banks and NBFIs have already signed agreements with the central bank to disburse the housing loans among the people belonging to the middle class.
Commercial banks or NBFIs having non-performing loan not beyond 15 per cent of their outstanding loans are eligible for the refinancing facilities under the scheme.
The demand for low-interest bearing housing loan under the refinancing scheme of the central bank has been rising gradually following relaxation of rules and regulations and reduction of rate of interest.
Around Tk 2.0 billion has already been disbursed by 20 banks and non-banking financial institutions (NBFIs) from the Tk 3.0 billion fund, the central bank officials said.
"We'll have to seek permission to allow disbursement of Tk 1.0 billion before the second year closes in June '09," a senior official of the Bangladesh Bank (BB) told the FE Tuesday.
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 most part of the targeted fund has been disbursed before the expiry of the two-year period," the BB official said, adding that the BB's department concerned will have to take permission from the higher authorities before disbursing the remaining amount, Tk 1.0 billion.
"We disbursed around Tk 200 million per month at 5.0 per cent interest rate to the banks and NBFIs under such refinancing scheme," another BB official told the FE.
He also said major part of the funds were received by the borrowers of Dhaka, Chittagong and Sylhet divisions.
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.
Among the banks and NBFI's, the Delta Brac Housing Finance Corporation Limited, generally known as DBH, has topped the list disbursing around Tk 1.0 billion of the fund, the BB official added.
"We're able to provide funds to our clients within 20 working days of their request after verifying all the relevant documents," Assistant Manager of the DBH Mir Mukhlesur Rahman told the FE Tuesday.
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.
"The demand for such loan has increased gradually due mainly to lower interest rate," Managing Director of the Industrial and Infrastructure Development Finance Company Limited (IIDFC) Asaduzzaman Khan told the FE.
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.
He also said the IIDFC has given priority to sanctioning the loan to service holders, including professionals like doctors and engineers, who are able to repay the credit on time.
Meanwhile, 32 commercial banks and NBFIs have already signed agreements with the central bank to disburse the housing loans among the people belonging to the middle class.
Commercial banks or NBFIs having non-performing loan not beyond 15 per cent of their outstanding loans are eligible for the refinancing facilities under the scheme.