Tk 2b fresh BB fund injected in housing scheme
Monday, 28 December 2009
Siddique Islam
The central bank has increased its refinancing fund for housing loan to Tk 7.0 billion from the existing Tk 5.0 billion to meet growing demand for the popular low-interest bearing credit facility.
"We've raised the amount to cater to rising demand for housing loan under our refinancing scheme," a deputy governor of the Bangladesh Bank (BB) told the FE Sunday.
The country's realtors welcomed the BB's latest move but said the refinancing fund should be enhanced further to make flats affordable to middle and lower-income people.
"We thank the BB for the increase. But it should be raised several folds considering growing demand for housing credits," President of the Real Estate and Housing Association of Bangladesh (REHAB) Tanveerul Haque Probal told the FE.
He said low and middle income people would be benefited by the latest BB decision as it would keep loans for purchasing apartments to much below the existing market rate of around 13 per cent.
The BB's board of directors approved the additional allocation amounting to Tk 2.0 billion in a meeting at the central bank Sunday with the governor Atiur Rahman in the chair, officials said.
It was the second time this year the BB injected fresh fund to the housing refinancing scheme. On April 12 this year, the central bank hiked the fund to Tk 5.0 billion from Tk 3.0 billion.
It has also allowed the credit facility to be used for buying or building flats in the outskirts of the capital.
So far this year the BB has disbursed housing loans worth Tk 4.80 billion through 21 commercial banks and non-banking financial institutions (NBFIs).
The fund was formed in July 18, 2007 with an initial allocation of Tk 3.0 billion to be disbursed over a period of three years.
"The demand for housing loan under the refinancing scheme is increasing gradually mainly due to the lower interest rate," a BB official said, adding the allocated fresh funds would be added in the refinancing scheme as soon as possible.
Under the BB's scheme, an applicant having a monthly income up to Tk 50,000 will be entitled for the loan and can borrow a maximum Tk 2.0 million at a flat interest rate of nine per cent.
The repayment tenure of the loan is 20 years with a maximum grace period of one year.
In May this year, the central bank relaxed regulations on the fund slashing interest rate to nine per cent from 10 per cent to make it popular and well within the range of middle income people.
The central bank has increased its refinancing fund for housing loan to Tk 7.0 billion from the existing Tk 5.0 billion to meet growing demand for the popular low-interest bearing credit facility.
"We've raised the amount to cater to rising demand for housing loan under our refinancing scheme," a deputy governor of the Bangladesh Bank (BB) told the FE Sunday.
The country's realtors welcomed the BB's latest move but said the refinancing fund should be enhanced further to make flats affordable to middle and lower-income people.
"We thank the BB for the increase. But it should be raised several folds considering growing demand for housing credits," President of the Real Estate and Housing Association of Bangladesh (REHAB) Tanveerul Haque Probal told the FE.
He said low and middle income people would be benefited by the latest BB decision as it would keep loans for purchasing apartments to much below the existing market rate of around 13 per cent.
The BB's board of directors approved the additional allocation amounting to Tk 2.0 billion in a meeting at the central bank Sunday with the governor Atiur Rahman in the chair, officials said.
It was the second time this year the BB injected fresh fund to the housing refinancing scheme. On April 12 this year, the central bank hiked the fund to Tk 5.0 billion from Tk 3.0 billion.
It has also allowed the credit facility to be used for buying or building flats in the outskirts of the capital.
So far this year the BB has disbursed housing loans worth Tk 4.80 billion through 21 commercial banks and non-banking financial institutions (NBFIs).
The fund was formed in July 18, 2007 with an initial allocation of Tk 3.0 billion to be disbursed over a period of three years.
"The demand for housing loan under the refinancing scheme is increasing gradually mainly due to the lower interest rate," a BB official said, adding the allocated fresh funds would be added in the refinancing scheme as soon as possible.
Under the BB's scheme, an applicant having a monthly income up to Tk 50,000 will be entitled for the loan and can borrow a maximum Tk 2.0 million at a flat interest rate of nine per cent.
The repayment tenure of the loan is 20 years with a maximum grace period of one year.
In May this year, the central bank relaxed regulations on the fund slashing interest rate to nine per cent from 10 per cent to make it popular and well within the range of middle income people.