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Bonanza for 7th pay commission beneficiaries – SBI unveils two new cheap housing loans

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SBI   unveiled a new cheaper home loan scheme for defense and other government employees. This new decision reflects to attract the donee of the 7th pay commission’s salary hike. SBI eyes that the surplus income of the employees can thus be utilized by government employees and defense personnel towards purchase of house.

What is pay commission?

  1. Pay Commissionis set up by Government of India. This commission gives its 7th Pay Commissionrecommendations regarding changes in salary structure of its employees.
  2. Since India’s Independence, seven pay commissions have been set up till now on a regular basis to review and make recommendations on the work and pay structure of all civil and military divisions of the Government of India.
  • This intermittent body is headquartered in Delhi and the first pay commission was established on January, 1946 andIt was under the chairmanship of Srinivasa Varadachariar.
  1. Government of India has initiated the process to constitute the 7th Central Pay Commission along with finalization of its Terms of Reference, the composition and the possible time frame for submission of its Report.
  2. On September 25, 2013 then Finance Minister P Chidambaram announced that Prime Minister Manmohan Singh has approved the constitution of the 7th Pay Commission. Its recommendations are likely to be implemented with effect from January 1, 2016. Justice A.K Mathur will be heading the Seventh Pay Commission.
  3. On November 19, 2015, the 7th Central Pay Commission recommended 23.55% hike in pay and allowances which will be implemented from January 1, 2016.

On 29 Jun 2016, Government accepted the recommendation of 7th Pay Commission Report with meager increase in salary of 14% after six month of intense evaluation and successive discussions. The Finance Minister of India claimed it historical increase of salaries due to little knowledge of Sixth Pay Commission.

New Housing Loan:-

State Bank of India introduced two new self customizable schemes as per the needs of the employees  without any processing fee in the following terms,

  • SBI Privilege Home Loan – government employees,
  • SBI Shaurya Home Loan – defence personnel.

The government employees are relaxed with installment tenure extending up to 75 years of age and lower EMI burden post retirement and 0.05 percent concession over the home loan interest.

  • It is noted that customers of other banks or financial institutions will have an option to switch over their home loan outstanding balance to SBI.