Up to Rs 5L car loan for govt workers
The state government has tied up with the Bank of India to provide loans of up to Rs 5 lakh to state government employees to purchase cars payable at an interest rate of 11.50% per annum.
A state government order issued on Thursday states, “Motor Car Advance (MCA) to state government employees is at present met from the state budget allocation. However, due to constraint on resources, it has not been possible to provide adequate allocation to satisfy the demands of government employees towards MCA. The state government, therefore, negotiated with the Bank of India to advance loans to interested government employees for the purchase of a motor car.”
The order states that the Bank of India has agreed to give Car loan to government employees effective from March 1, 2011. The advances for the purchase of a motor car will be disbursed by the Bank of India up to an aggregate limit of Rs 40 crore. The loans will be disbursed on applications by the individual government employees to their respective head of department. “The advance for the purchase of the car will be repaid in full in monthly instalments by way of salary deduction within a period not exceeding 200 equal monthly installments. The recovery of the advance will commence from the month succeeding the month of disbursement of loan by the bank,” the state government notification states.
The loan will be sanctioned by the head of department and will be secured by hypothecation of the car duly endorsed on the registration certificate of the motor car.
The state government will hold the hypothecation in the name of the Bank of India and the rate of interest payable will be at 11.50% per annum.
The maximum motor car advance admissible will be Rs 5 lakh or the cost price of the car, whichever is less.
“The advance for the purchase of the car will be repaid in full in monthly installments by way of salary deduction within a period not exceeding 200 equal monthly installments. The recovery of the advance will commence from the month succeeding the month of disbursement of loan by the bank,” the state government notification states.
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