Public sector, Bank of India (BoI) announces a special home loan package for the new customers of the bank. The bank has introduced the package as ‘Star Home Loan Scheme' and it is almost similar to the one started by most PSU banks to on government's behest.
Under this scheme, new home loan borrowers of the bank will be offered home loans up to Rs 5 lakh at 8.5% and loans between Rs 5lakh and Rs 20 lakh will be extended at 9.25%. The bank will offer these loans at a fixed interest rate for a period up to 20 years.
Moreover the bank has also revised margin money and waived off both processing fee and pre-payment charges for loans under this scheme. However the bank explained that the scheme ‘would not apply to swapping of loans'. Swapping of loans means take over of loans from other banks or financial institutions.
The main difference between this package and loans offered by other PSU banks is the insurance cover. The bank is offering an additional facility of payment of insurance premium to its new home loan borrowers. In a circular issued by the bank, it was stated: "it will bear the ICICI Prudential life insurance policy premium charges by debiting it as miscellaneous charges in its profit and loss account."
Presently the home loan customers of BoI get an option of the ICICI Prudential life cover but the premium is paid by borrower.
However All India Bank Employees Association (AIBEA) does not agree with the bank decision to support ICICI, when it already has a tie-up National Insurance Company. They want the bank should rather support the public sector insurance company.
General Secretary of AIBEA, Mr C.H. Venkatachalam said, "Where is the need to support ICICI, and that too by bearing the premium on behalf of the borrower?"