EPFO members to get cheaper home loans
Retirement fund body, EPFO stated that its members will soon be able to mortgages their Provident Fund (PF) accounts for home loans.
Employees Provident Fund Organisation (EPFO) expects to garner more returns through investment in home loans.
The Central Board of Trustees will decide on the loan's terms and conditions which may include clauses like EPFO members to get 1-1.25% cheaper loan.
Members will be allowed to buy homes in affordable housing projects. EPFO will also decide on home loan eligibility and subscribers guarantee.
The funding for this projects is reported to come from its inoperative account.
Sources told Zee Business that EPFO is also in talks with two government banks such as SBI.
However, customers will have to pay EMI against home loans.
The committee has unanimously recommended a scheme to facilitate subscribers to buy houses where they will get an advance from their PF accumulation and will be allowed to pledge their future PF contribution as EMI (Equated Monthly Instalment) payment.
“I am on-board for whatever is good for the investor,” EPFO senior official said in a statement.
Currently about Rs 44,000 crore is lying in EPFO in the inoperative account. The organization invests its funds in debt instruments which remunerate comparatively lesser returns.
The proposal will be placed before the EPFO's Central Board of Trustees meeting next month. Once approved by the CBT, the scheme will be available for the subscribers.