EMPLOYEE HOME LOAN

EMPLOYEE HOME LOAN

NAME: JAGRUTI GODAMBE ROLL NO : 15

DIV: PG A

STORY OF HOME LOAN• Back in the early 1990s, the city of seattle faced a challenge. due to the high costs of living in

the city, police and fire department employees were forced to live in surrounding suburbs and neighbouring cities, resulting in lengthier commutes. Hence proximity—was an issue

• To help solve this, the city of seattle was the first employer to adopt in 1994 the hometown home loan program, an employer-assisted housing benefit that helps employees of participating companies become homeowners

• the hometown home loan program helps both employers and employees. it enables employers to offer a low-cost, high-reward benefit to their overall benefits package, and employees get both financial help and real estate education to make smarter home buying decisions

Source : Article of LORRI Freifeld ON HOME STREET.COM

WHAT IS EMPLOYEE HOME LOAN

It is the facility given by the employer to the employee for purchase /construction / renovation of a house or a flat

PURPOSE

To alleviate an employee's financial stress and the distraction it might cause in the workplace

WHY COMPANY GRANTS HOME LOANS

• It helps in attracting and retaining the employees of the organisation

• It also helps in building a strong employer – employee relationship

HOME LOAN POLICY OF TJSB BANK•ELIGIBILITY CRITERIA : 1. who have total banking service of 5 years in any bank

2. who have completed 1 year service in TJSB bank

3. If both the husband and wife are employed in the same bank, they shall be eligible for this facility only for one accommodation

SOURCE : MEMORANDUM OF AGREEMENT OF TJSB BANK

•TJSB bank grants this type of loan to its employees maximum on 3 occasions

•The staff member who has completed 20 years of service in TJSB bank is only eligible for loan on third occasion

•Loan is provided on third occasion when the staff member intends to purchase the better accommodation

MAXIMUM LOAN LIMIT AND THE RATE OF INTEREST OF TJSB

cadre Service equal to or more than 5 years and below 10 years

Service equal to or more than 10 years and below 15 years

Service equal to or more than 15 years and below 20 years

Service equal to or more than 20 years

Officer in senior management level

32,00,000 40,00,000 45,00,000 50,00,000

Officer in middle level management

30,00,000 35,00,000 40,00,000 45,00,000

Officer in junior level management

20,00,000 25,00,000 30,00,000 35,00,000

peon 15,00,000 18,00,000 20,00,000 25,00,000

Source : Memorandum of Agreement of TJSB bank

RATE OF INTEREST APPLICABLE FOR ABOVE MENTIONED LOAN AMOUNTCADRE AMOUNT INTEREST RATE

OFFICER IN SENIOR MANAGEMENT

22,00,000 4 %

OFFICER IN MIDDLE MANAGEMENT

20,00,000 4 %

OFFICER IN JUNIOR MANAGEMENT

15,00,000 4 %

PEON 10,00,000 4 %

•If any staff member intends to avail this loan facility for purchasing accommodation in the city or town where he/she is not posted and which will not be used for self occupancy, then the rate of interest is 8.5 % charged on the entire loan amount

REPAYMENT

•Repayment of loan is done in 300 equated monthly instalments including interest directly deductible from salary

HOUSING LOAN SUBSIDY POLICY OF ACC LTD

1. Policy : To provide assistance to employees for purchase of house2. Purpose : To reduce the financial burden on management staff3. Practices : Employees can obtain home loan directly from any bank of their choice the loan is admissible to an eligible staff if he/she purchases a house in his / her spouse’s name only

Source : ACC HR MANUAL

•ELIGIBILITY :o Management staff will be eligible to get the housing loan subsidy one year after

confirmation

oEmployees are eligible for availing home loan subsidy from the company at the rate of 6 % per annum

oThe maximum loan limit on which the subsidy is payable is mentioned in the individual perk sheet

oIn case of multiple home loans, the subsidy will be earned on difference between the entitled maximum limit and the actual amount already availed as housing loan