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CIR. NO.

:: 331 / 2010
INDEX :: ADV:: 152
DATE :: 20.09.2010
CREDIT POLICY SECTION
AHIS
RISK MANAGEMENT WING
HEAD OFFICE : BANGALORE-560002

SUB: EMPLOYEES' HOUSING LOAN (EHL) SCHEME OF THE BANK


- MODIFICATIONS

SYNOPSIS

 AMOUNT OF LOAN UNDER EHL ENHANCED TO ALL CATEGORIES OF


EMPLOYEES
 MARGIN FIXED AT 10% OF THE PROJECT COST
 ROI WILL BE @ 8% P.A. (SIMPLE)
 REPAYMENT IN 240 MONTHS
 AMOUNT OF LOAN FOR REPAIRS/ MAINTENANCE/ ENLARGEMENT OF
EXISTING DWELLING UNIT ENHANCED
 REVISED LIMIT FOR PTEs
 CEILING OF PROJECT COST IN RESPECT OF OFFICER EMPLOYEES
DISPENSED WITH

Attention of branches/ offices is invited to Manual of Instructions on Housing


Loan to Employees (updated till 31.07.2005) wherein detailed guidelines on
Housing Loan to Employees are enumerated. Further, vide Cir. No.217/2006
dated 12.08.2006 branches/ offices were advised regarding discontinuation
of permitting the employees to avail differential amount from HDFC, CFHL
and LICHFL on paripassu charge basis, instead permitting them to avail
loan under Housing Finance Scheme of the Bank on the same terms and
conditions as applicable to customers.

Board of Directors of the Bank have permitted improvement in the scheme


in respect of the loan amount and certain other terms and conditions of the
scheme.

As per the revised EHL scheme, the quantum of Housing Loan to Officers,
Workmen and sub-staff is enhanced to Rs.20 lacs, Rs.12 lacs and Rs.8 lacs
respectively. Repayment of the loan is fixed at 240 months. The ROI is 8%
simple and the revised ROI can also be made applicable to the employees
who have already availed EHL/AHL, at their option.

The details regarding the revised quantum of loan under EHL and certain
other terms and conditions are furnished in the annexure to this circular.

The modified provisions of EHL scheme shall come into force with
immediate effect.
All other guidelines relating to eligibility, sanction, disbursement, minimum
net take home salary, sanctioning authority etc., to the extent not modified
as per the circular shall remain unchanged.

S VENKATESH
GENERAL MANAGER
ANNEXURE TO CIR. NO.331 / 2010 DATED 20.09.2010

EMPLOYEES' HOUSING LOAN (EHL) SCHEME OF THE BANK

1. Revised provisions/ Terms:

Particulars Officers Clerical staff Sub-staff


Quantum of 60 times of latest drawn monthly gross salary
loan amount subject to a maximum of
Rs.20 lacs Rs.12 lacs Rs.8 lacs
Margin 10% of the project cost
Rate of 8% p.a. simple
Interest
Repayment To be repaid in 240 months. Principal in 168
equal monthly instalments and interest in 72
equal monthly instalments thereafter for all
employees uniformly. The monthly net take home
salary after taking into account the proposed EHL
repayment instalments shall not be less than 25%
of the monthly gross salary.

2. Loan amount for repairs/ maintenance/ renovation/ enlargement of


existing dwelling unit in case the employee has not availed loan
under EHL:

Category Officers Clerical staff Sub-staff


Loan
Amount (Rs. in lacs) 5.00 3.00 2.00
Repayment:
To be repaid in 120 months; Principal in 84 equal monthly
installments and interest in 36 equal monthly installments
thereafter. Other terms and conditions as applicable to EHL.

3. Revised limit to part-time employees (PTEs), who are confirmed in


the services of the Bank and fitted with time scale of wages under
Housing Loan scheme applicable to the sub-staff of the Bank:

Category Revised limit* Repairs/ Enlargement/


Renovation**
1/3 of the wages Rs 2,67,000/- Rs 68,000/-
½ of the wages Rs 4,00,000/- Rs 1, 00,000/-
¾ of the wages Rs 6,00,000/- Rs 1,50,000/-

* 60 times of the latest drawn monthly gross salary subject to a


maximum of the limit specified
** Where EHL is not availed
Other terms and conditions as applicable to EHL for substaff
4. Take over of outstanding institutional liability in respect of housing
loans availed for acquiring/constructing a house/flat from
institutions/ banks such as housing finance institutions/companies,
housing boards, commercial banks including our Bank can be
permitted provided the sanctioning authority at Circle level is
satisfied that the reasons for not availing EHL from the Bank initially
were genuine.

5. Where an employee has already availed EHL and/ or AHL earlier,


the balance eligible amount may be availed as AHL (Additional
Housing Loan) under existing guidelines.

Such AHL can be permitted to clear the outside borrowings from


institutional and personal sources taken for the purpose of
completing the house construction or for meeting the differential
cost for acquiring subject to condition that the employee must have
made prior declaration in this regard and proper documentary proof
(complying with any statutory requirements) is submitted

AHL can be permitted for enlargement, repairs, renovation,


completing incomplete houses etc. Further, it can be extended to
meet the differential project cost of acquiring alternate house
property while substituting the existing mortgaged property where
the housing loan is permitted to be continued.

AHL can also be permitted for acquiring alternate house/flat with


larger accommodation where the housing loan earlier permitted is
closed by disposing of the property acquired/ mortgaged.

6. The Rate of interest is fixed at 8% p.a. (simple) in place of existing


slab structure. The revised ROI can be extended to existing EHL/
AHL accounts at the option of borrower-employees. In such cases a
request letter for availing revised ROI to be submitted to the branch
where the Housing Loan is availed (advancing branch). The branch-
in-charge may permit to effect such modifications and confirm the
same to the Circle Office. Format of the letter is enclosed.

7. Ceiling for Project Cost in case of officer-employees: The existing


ceiling of project cost in case of housing loans proposal from officer
employees is discontinued. Housing loan proposals from officer-
employees can be considered without reference to any maximum
ceiling of project cost as in case of other employees. However, it
should be ensured that other guidelines such as net take home
salary, margin and applicable guidelines shall be adhered to.
Request Letter for availing revised ROI applicable for EHL/AHL

To

The Branch Manager (Advancing branch)


Canara Bank
……….

SUB: My Housing Loan account (no……….) with your branch

I/We have availed Employees’ Housing Loan / Additional Housing Loan from
your branch as follows:

Nature of Loan / Loan Account No. Amount of Loan Rate of Interest

Bank has revised the interest structure for EHL/AHL. I/We request the Bank
to permit switch over of the existing interest rate on my /our EHL/AHL to
the ROI of 8% p.a., simple as specified in the H.O Circular 331/2010 dated
20.09.2010 which will be applied uniformly to the said loan.

I /We further agree that the interest rate as stated above will be
applicable in respect of my loan account/s from the date of receipt of this
letter at the advancing branch. I hereby authorise you to revise the
repayment schedule as per Bank’s norms, if warranted. This letter may be
treated as part and parcel of the loan papers executed by me /us and I/we
am/ are bound by all other terms and conditions stated in loan documents
and Sanction letters.

1. 1.
2. 2.
Borrower/s / Co obligant Guarantor/s

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