The Haryana government on Wednesday said state government employees would now be able to avail loans through scheduled banks at the same rate of interest as is admissible through the government.
"Haryana government employees will have win-win situation as far as the facility of loans for housing, vehicles, computers and marriage etc. are concerned. Also, now they will not have to wait for days to get their applications processed," a government spokesman said here.
The decision was taken in a meeting of the state cabinet here on Wednesday.
"The cabinet decided to shift its portfolio to the banks. The state government would sign a memorandum of understanding (MoU) with banks, which would ensure quick release of loans when required," the spokesman said.
The rate of interest charged by the state government on loans to employees is lesser than the prevailing market rate of bank loans.
"It was also observed that the beneficial rate at which the loan is provided to the employees is linked to the rate of interest applicable on public provident fund and is revised by the state government from time to time," the spokesman pointed out.
"The budgetary allocation made annually by the government does not suffice the need of all the employees," he said.
"Therefore, there is discontent amongst the employees. To cater to the need, the employees line-up to avail the discretionary quota of the finance minister allocated on year to year basis."
"The decision to shift the portfolio of the state government to the banks would overcome the discontent amongst the employees as all of them would be able to avail this facility and amount of loan presently given would be available with the government for diversification towards the developmental works," a cabinet note pointed out.
"Also, this shift would increase the clients of the banks and enhance their priority sector lending," it said.
As per the new proposal, the state government would have to make budgetary allocation only to the tune of a maximum of three percent of the existing allocated budget on account of interest subvention to be paid to the banks to overcome the difference in rate of interest changed by the bank and the one offered to government employees.
There are over 2.74 lakh government employees, out of which only 24,507 employees have availed housing loan and 9,757 took vehicle loan.
As many as 7,144 employees have taken computer loan and 16,887 have availed marriage loan from the government till March 31, 2014, the spokesman added.
