Loans to Employees

S. R. 0. 414(I)/81. - Old-Age Benefits Act, 1976 (XIV of 1976) the Board of Trustees of the Employees' Old-Age Benefits Institution is pleased to make the following regulations, the same having been previously published as required by sub-section (1) of the said section, namely: 1. Short title, commencement and application. - (1) These regulations may be called the Employees' Old-Age Benefits (Loans to Employees) Regulations, 1980. (2) They shall come into force at once. (3) They shall apply to all persons in permanent employment of the Institution, except employees on deputation or contract, to whom they shall apply to the extent. if any specified in the terms of their deputation or contract, as altered from time to time. 2. Definitions. - (1) In these regulations, unless there is anything repugnant in the subject or context; (a) "Act" means the Employees' Old-Age Benefits Act. 1976 (XIV of 1976). (b) "Authorized" mean authorized by the competent authority. (c) "Board" means the Board of Trustees of the Institution constituted under section 7 of the Act.
(d) "Chairman" means the Head of the Institution.

(e) "Competent Authority" means the Chairman or any Officer or Committee appointed or nominated by the Chairman for the purposes of these regulations. (f) "Institution" means the Employees' Old-Age Benefits Institution nominated or established under the provisions of the Act. (g) "Pay" means the amount to be drawn monthly by an employee as pay fixed for him in a pay scale or otherwise and includes special pay and any other emoluments classed as pay put does not include allowances. (h) Permanent Employee" means a full time employee of the Institution on monthly salary who has been confirmed in service and to whom these regulations apply. (i) "Salary" means basic pay including any other emoluments classed as pay and all other allowances admissible under the E.O.B.I. (Employees' Service) Regulations. (2) Words and expressions used but not defined in these, regulations shall have as assigned to them in the Act.

3. Subject to availability of the Fund for this purpose and subject to such conditions as he may consider proper, the competent authority may grant any one or more of the following categories of loans to a permanent employee on his application in writing for the grant of such loan to him: (i) (ii) (iii) (iv) (v) (vi) Loan for purchase of a Motor Car/Motor Cycle/Scooter Loan for purchase of Bicycle. Loan for purchase of a House/Flat/Apartment or for House Building. Loan for Repair/Additional/Alteration of a House/Flat/Apartment. Loan for payment of House Rent Advance. Loan for Miscellaneous Requirements.

4. Loan for purchase of a Motor Car/Motor Cycle/Scooter. - (1) Loan for purchase of Motor Car/Motor Cycle/Scooter shall be admissible to permanent employees up to the following maximum limits: (i) Loan for purchase of Motor Car 75% of the price of the Motor Car or 18 months pay of the employee concerned which ever is less. 75% of the price of Motor Cycle Scooter or 12 months pay of the employee concerned which ever is less.

(ii) Loan for purchase of Motor Cycle/Scooter

Provided that Loan for purchase of a Motor Car shall be admissible only to those permanent employees who tie entitled to Car Maintenance Allowance or to the Supervisory Field Officers. (2) Before payment of the amount of loan granted to an employee, the employee shall execute a letter of authority, authorizing the Institution to adjust, at any time, the balance of loan amount together with the interest and penal interest from the dues, if any, payable to him including the amount payable to him as gratuity and/or provident fund. He shall also submit two sureties acceptable to the Institution guaranteeing the repayment of the loan amount. The senate and the documents pertaining to the vehicle will be examined by the Institution and approved by the Officer authorized in this behalf by the competent authority. (3) The loan under this regulation shall be further secured by a hire purchase agreement with the ownership of the vehicle vesting in the Institution and will be transferred to the employee on full adjustment of the loan amount. The vehicle shall he comprehensively insured from a tariff insurance company at the cost of the employee who will also be liable to pay the motor vehicle tax regularly: Provided that where the competent authority is satisfied that comprehensive insurance was not possible in respect of the said motor car/motor cycle/scooter, the condition of comprehensive insurance may be waived by him. (4) Interest at 1/2 the prevailing Bank Rate will be charged on the amount of loan sanctioned under this regulation. (5) In case an employee is/or becomes entitled to loan for purchase of Motor Car but has already availed himself of loan for purchase of Motor Cycle/Scooter, then he may avail himself

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of loan for purchase of Motor Car only when he adjusts the loan taken for purchase of Motor Cycle/Scooter in full. (6) Loan granted under this regulation with interest will he recoverable by deduction from the salary of the employee concerned in 80 equal monthly installments commencing one month after the grant of loan. (7) In case of the employee leaving the service of the Institution, for any reason whatsoever, the balance of loan amount outstanding against him shall become payable forthwith. In case of default the Institution shrill charge penal interest at the rate of 4% above the agreed rate with monthly rests from the date of his leaving the service of the Institution till its full adjustment/repayment. 5. Loan for purchase of Bicycle. - (1) Interest free loan for purchase of Bicycle not exceeding Rs. 600 may be sanctioned to a permanent employee in Pay Scale 1 to 7 subject to other provisions of these regulations. (2) Before payment of the amount of loan granted to an employee, the employee shall execute a letter of authority, authorizing the Institution to adjust at any time, the balance of loan amount together with the interest and penal interest from the dues, if any, payable to him including the amount payable to him as gratuity and/or provident fund. He shall also submit two sureties acceptable to the Institution guaranteeing the repayment of the loan amount. (3) Loan granted under this regulation with or without interest, as the case may be will be recoverable by deduction from the salary of the employee concerned in 18 equal installments commencing one month after the grant of Loan. (4) In case of employee leaving the service of the Institution, for any reason whatsoever, the balance of loan amount outstanding against him shall become payable forthwith and adjusted in lump sum from the dues if any, payable to the employee, including the amount payable to him as gratuity and/or provident fund. 6. Loan for purchase of House/Flat/Apartment or for House Building. - (1) Loan for purchase, of a House/Flat/Apartment or for House Building may be sanctioned to a permanent employee in his own name, or in the name of his spouse up to a maximum of his 75 months pay subject to other provisions of these regulations. (2) The amount of loan sanctioned for purchase of a House/Flat/Apartment will be paid by the Institution directly to the vendor through crossed cheque at the time of execution and registration of sale deed by him in favour of the employee concerned on execution of an undertaking by the employee. The employee shall mortgage the said property with the Institution by a registered mortgage deed simultaneously with the transfer of the same in his favour. (3) The amount of loan for House Building sanctioned under this regulation will be paid to the employee concerned in four equal installments as follows: (a) First installment will be paid for purchase of plot and provisions of subregulation (2) of this regulation shall apply mutatis mutandis with regard to the payment of said installment. Second installment will be paid after the plot acquired by the employee is mortgaged in accordance with clause (a) above. third installment will be paid after the construction up to Plinth level has been completed; fourth installment will be bind after the construction up to roof level has been completed.

(b) (c) (d)

Provided that in case the employee already owns the plot in his own name or in the name of his spouse at the time of sanction of loan to him under this regulation on which he

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proposes to build a house, he will be paid the amount of loan in three equal installments in accordance with clauses (b) to (d) above. (4) The Payment of installments will be made on a report by an Officer authorized in this behalf to the effect that the respective stage of construction as contemplated in sub-regulation (3) of this regulation has been completed. (5) Before the payment of the amount of loan or the first installment thereof the employee concerned shall execute a letter of authority, authorizing the Institution to adjust, at any time the balance of loan amount together with the interest and penal interest from dues if any, payable to him including the amount payable to him as gratuity and/or provident fund. He shall also submit two sureties acceptable to the Institution guaranteeing the repayment of the loan amount. (6) The loan under this regulation shall be further secured by a registered mortgage deed of the house/flat/apartment in respect of which the loan is sanctioned. (7) In addition to the securities provided under sub-regulations (5) and (6) of this regulation the repayment of loan shall also be covered through a recognized insurer by a Life Insurance Policy duly assigned in favour of the Institution for a sum assured being not less than the amount of outstanding loan with interest from time to time until repayment of the entire loan. The premium in respect of such Insurance Policy shall be payable by the employee to whom the loan has been advanced. In case the employee defaults in the payment of premium, the Institution shall recover and pay the premium by debit to the salary of the said employee. (8) Loan under this regulation will be interest free in case of members; of staff in Pay Scales 1 to 7. In other cases, interest will be charged at the same rate as prescribed from time to time by the Federal Government in the case of Government Servants in National Pay Scales 16 and above in respect of House Building Loans. (9) The amount of loan sanctioned under this regulation with or without interest, as the case may be, shall be recoverable by deduction from the salary of the employee concerned in 180 equal monthly installments, commencing one month after the grant of loan or installment thereof. (10) In case of the employee leaving the service of the Institution, for any reason whatsoever, the balance of loan amount outstanding against him together with the amount of interest and penal interest shall become payable forthwith and the institution shall charge, penal interest at the rate of 4% above the agreed rate with monthly rests from the date of his leaving the service of the Institution till its full adjustment/repayment. 7. Loan for Repair/Addition/Alteration of House/Flat/Apartment - (1) Loan for necessary repair/addition/alteration of a house/flat/apartment owned by a permanent employee may be allowed upto a maximum of his 6 months' pay subject to other provisions of these regulations. (2) Loan under sub-regulation (1) of this regulation will be sanctioned on verification by an Officer authorized in this behalf of the state of the House/Flat/Apartment for the repair/addition/alteration of which the application for loan is made. (3) The loan under this regulation shall be secured in the manner provided in subregulations (5) and (6) of regulation 6 of these regulations. (4) Loan under this regulation will be interest free in case of members of staff in Pay Scale 1 to 7. In other cases, interest at 1/2 the prevailing Bank Rate will be charged on the amount of loan sanctioned under this regulation.

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(5) The amount of loan sanctioned under this regulation together with interest shall be recoverable by deduction from the salary of the employee concerned in 24 equal monthly installments commencing one month after the grant of loan. (6) In case of the employee leaving the service of the Institution, for any reason whatsoever, the balance of loan amount outstanding against him together with amount of interest and penal interest shall become payable forthwith and the Institution shall charge penal interest at the rate of 40% above the agreed rate with monthly rests from the date of his leaving the service of the Institution till its full adjustment/repayment. 8. Loan for payment of House Rent Advance. - A permanent employee, in order to acquire or retain at the station of his posting residential accommodation for himself, may be allowed such amount of loan as may be required to be paid by him to the landlord by way of deposit/advance rent, but not exceeding his 12 months pay, subject to other provisions of these regulations. (2) The amount of loan sanctioned under this regulation will be paid by the Institution directly to the landlord through crossed cheque on submission of the duly executed agreement of rent by the employee in respect of the house/flat apartment for which the loan is sanctioned. (3) Before payment of the amount of loan granted to an employee, the employee shall execute a letter of authority, authorizing the Institution to adjust, at any time the balance of loan amount from the amount payable to him as gratuity and/or provident fund. He shall also submit two sureties acceptable to the Institution on guaranteeing the repayment of the loan amount. (4) Interest at 1/2 the Bank Rate will be charged on the amount of loan sanctioned under this regulation. (5) The amount of loan under this regulation with interest shall be recoverable by deduction from the salary, of the employee concerned in 36 equal monthly installments commencing one month after grant of loan. (6) In case of the employee leaving the service of the Institution for any reason whatsoever, the balance of loan amount outstanding against him together with the amount of interest and penal interest shall become payable forthwith and the Institution shall charge penal interest at the rate of 4% above the agreed rate with monthly rests from the date of his leaving the service of the Institution till its full adjustment/repayment. 9. Loan for Miscellaneous Requirements. - (1) A permanent employee may be granted loan upto a maximum of his six months pay, to meet certain pressing needs for money in connection with marriage of self or a member of his family, death of a near relation prolonged illness of a member of his family or his parents, pilgrimage out of Pakistan or self or parents, expenses on education of children or any other such genuine requirement as may be entertained by the competent authority. (2) Before payment of the amount of loan granted to an employee, the employee shall execute a letter of authority, authorizing the Institution to adjust at any time, the balance of loan amount from the amount payable to him as gratuity and/or provident fund or from other dues, if any. He shall also submit two sureties acceptable to the Institution guaranteeing the repayment of the loan amount. (3) Interest at 1/2 the prevailing Bank Rate will be charged on the amount of Loan sanctioned under this regulation. (4) Loan granted under this regulation with interest, will be recoverable by deduction from the salary of the employee concerned in 24 equal monthly installments commencing one month after the grant of loan. (5) In case of the employee leaving the service of the Institution for any reason whatsoever, the balance of loan amount outstanding against him together with the amount of

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interest and penal interest shall become payable forthwith and the Institution shall charge penal interest at the rate of 4% above the agreed rate with monthly rests from the date of his leaving the service of the Institution till its full adjustment/repayment. 10. General Conditions. - Notwithstanding anything to the contrary herein before contained, all loan grants will be subject to the following conditions (a) Loan under different provisions of these regulations may be granted simultaneously to an employee subject to the condition that the aggregate of the installments for repayment of the said loans and all other deductions under these regulations from the salary of the employee concerned shall not exceed 40% of his salary. In case of those employees who are due to retire before the period over which the installments for repayment of loan is spread under these regulations, the entitlement for such loan shall be reduced to such extent as may be fully repaid before his retirement. Loans will be granted subject to allocation of funds by the Institution.

(b)

(c)

[F. No. SS.2(26)/80.]

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