The house building advance (HBA) for employees of the Odisha government was increased from Rs 25 lakh to Rs 40 lakh on Tuesday. An 8 per cent flat interest rate was also implemented. More than three lakh employees will gain from the change. The employees have been qualified for loans up to Rs 25 lakh since 2010. Depending on the loan accepted, there were various interest rates, ranging from 6% (for a loan up to Rs 50,000) to 11.5 %. (for Rs 25 lakh). From this point forward, the interest rate will remain 8%, regardless of the loan amount up to a maximum of Rs 40 lakh.
According to a statement released by the government, all regular employees are entitled to apply for the loan in two phases at a 60:40 ratio.
According to a government official, the state action is in line with the Centre's initiative to lower interest rates to 7.1 per cent and with the recommendations of the 7th Pay Commission. The 7.1 per cent HBA rate for central government employees is set by the Union Ministry of Housing and Urban Affairs for loans obtained between April 2022 and March 2023. The official said that because the principal and interest are collected from the employees' salaries, there is no financial impact on the government. The advance will be paid back from the employee's salary and pension after the advance has been sanctioned, taking into account the employee's remaining service time and the salary received.