House Building Advance: RBE No.369/1987 – Liberalisation of HBA Scheme

No.F(E)Spl/87/Adv 3/12, dated 09.07.1987

Sub: Liberalisation of HBA Scheme for Central Government employees/ Railway employees.      

1. Liberalisation of the existing rules governing the operation of House Building Advance Scheme has become necessary consequent upon introduction of the revised scales of pay based on the Report of the IV Central Pay Commission and due to increase in cost of construction.

2. After considering the recommendations made by an Inter-Ministerial Group constituted for this purpose, the President is pleased to approve the following changes in the existing scheme: 

(I) Cost-Ceiling Limit:

The existing cost-ceiling limits as prescribed in the then Ministry of Works and Housing’s O.M. No.I/17015/6/83/H.III, dated 7^th April, 1984 forwarded under this Ministry’s letter No.F(E)Spl./84/Adv 3/2, dated 12.04.1984, will be re-adjusted as under:

	Category	Cost-ceiling
1	For employees whose 50 months’ basic pay is upto Rs.135000	Rs.2.00 lakhs
2	For employees whose 50 months’ basic pay exceeds Rs.135000 but is upto Rs.225000	Rs.3.00 lakhs
3	For employees whose 50 months’ basic pay exceeds Rs.225000	Rs.4.00 lakhs

Where the Administrative Ministry is satisfied on the merits of the case, they may relax the cost-ceiling upto a maximum of 25% of the cost- ceiling mentioned above in individual cases.

(II) Quantum of House Building Advance (HBA):

(a)  The existing maximum limit of House Building Advance viz.,100 month’s pay subject to a maximum of Rs.1.25 lakhs, will be revised to 50 times the monthly basic pay or Rs.2.50 lakhs whichever be lower be for construction/ acquisition of a house.

(b)  The existing limit of 100 times monthly basic pay subject to a maximum of Rs.40000 will be revised to 50 times monthly pay or Rs.60000 whichever is less for enlargement of existing house; subject to the condition that the amount of advance will be limited to the repaying capacity of the  employee or the actual cost of construction/ acquisition/ enlargement, whichever be lower.

(III) Rates of Interest:      

Existing rates of interest on House Building Advance as notified vide this Ministry’s letter No.F(E)Spl/86/Adv 3/9, dated 04.08.1986, is modified as under:

	Amount of Advance	Rate of interest
(a)	Sanctioned advance upto Rs.50000	7%
(b)	Sanctioned advance upto Rs.1.00 lakh	8%
(c)	Sanctioned advance upto Rs.1.50 lakh	9%
(d)	Sanctioned advance upto Rs.2.00 lakh	10%
(e)	Sanctioned advance upto Rs.2.25 lakh	10.5%
(f)	Sanctioned advance upto Rs.2.50 lakh	11%

(IV) Repaying Capacity:

The repaying capacity of applicant Railway employee will be computed as under:

	Length of remaining service	Slab of repaying capacity
(a)	Officials retiring after 20 years	35% of the basic pay
(b)	Officials retiring after 10 years but not later than 20 years	40% of the basic pay after adjustment of 60% DCRG
(c)	Officials retiring within 10 years	50% of basic pay after adjustment of 70% of DCRG

The additional interest of 2-1/2% above the prescribed rates of interest, laid down in the then Ministry of Works and Housing’s O.M. No.I/17011/14/78/H.III, dated 20.05.1980, forwarded under this Ministry’s letter No. F(E)Spl 80 Adv 3/4, dated 08.07.1980 will not be taken into account for the purpose of computing the repaying capacity.

3. The past cases where house building advance has already been sanctioned but not drawn by the employee may be reviewed for enhancement of advance, if applied for. In cases where the house building advance has  been sanctioned and also drawn, the enhancement will be subject to the following conditions:

(a) The Government servant should not have drawn the entire amount of house building advance sanctioned under the earlier orders.

(b) The revised amount of house building advance calculated as per the liberalised scheme should not exceed 50% of the House Building advance previously sanctioned.

Download Railway Board Circular RBE No.369/1987

Forward reference ⇒ RBE No.40/1988,