Friday, February 25, 2011

Joint memorandum to MD on Housing loan problems



Further to our meeting with MD on 23rd February 2011 on housing loan problems, NOINO & NOIW submitted a joint memorandum to Shri D K Mehrotra, Managing Director, LIC  yesterday i.e. on 24th of February 2011 in this regard. We have suggested an immediate temporary solution as well as a permanent solution (i.e. to bring back the portfolio to LIC HPF). The text of the memorandum is reproduced below:

24.2.2011.
----------------
Shri D K Mehrotra,
Managing Director,
L.I.C. of India.

Respected Sir,

Re: Problems faced by the employees after transfer of Housing loan portfolio to LIC HFL


             This is further to our discussions on the above issue. As desired by you, we are enclosing a few representative cases which reflect the problems faced by the LIC employees after the Staff Housing loan portfolio was transferred to LIC HFL. However, we would first like to highlight the background of the issue:

           It was instructed vide CO/Os circular dated 12.04.2010 that LIC HFL would send a consolidated Demand Invoice to O.S.Dept. of the Designated Divisional Office. LIC shall recover from the salary of the employee the pre EMI and add the subsidy of the Corporation and remit it to LIC HFL Back Office through consolidated single cheque. More than 10 months have elapsed. It was also intimated vide OS/Salary circular dated 18.08.2010 “subsidy module is being developed in co-ordination with SDC and LICHFL. Once the subsidy module becomes functional, the concerned OS.Dept. of the Division will remit the EMI to LIC HFL as per the instructions that will be issued in due course”. More than 6 months have elapsed. As the subsidy module has not been provided the divisions have not been able to start the process envisaged vide CO/OS circular dated 12.04.2010.
     

     Due to this, at the cost of repetition, we would like to reproduce the general problems faced by the LIC employees:-

  1. Callous & casual approach of the HFL officials:- This has been reported from all over the country.
  2. Requirements asked again & again: - Original documents are asked again & again. Further, requirements are not asked at a single stroke. Once some requirements are submitted, again some more are asked.
  3. Subsidy not received:- The full loan amount is charged at HFL rate. The employees are not getting the benefit of the subsidy. The loans disbursed earlier have also not been converted to cadre loan. Salary deductions have not started. The effect of non-receipt of subsidy is that very recently LIC HFL has sent mails to all LIC employees who have availed housing loan with increased EMI’s. This has come as a rude shock to the employees.
  4. Deduction of instalments according to sanctioned loan & not the reimbursement portion :- E.g. if the total sanctioned loan is 20 lakhs, & the 1st instalment of 2 lakhs is received by the employee then the  employee is being asked to pay EMI on 20 lakhs instead of 2 lakhs.
  5. Delay in sanctioning of loan:- There is a delay in sanctioning of loans in many offices. There is no designated person to attend LIC employees. Due to delay in sanctioning of loan, some employees had to pay interest to the builder while some had to give up purchasing the flat & look elsewhere for loan.
  6. Location of HFL offices: - In many places, HFL offices are located far away from the office/residence of the employee & hence they have to spend money/leave for the loan.
  7. Valuation of perquisites: - The valuation of perquisites has not been completed by many Divisions. The employees are in a limbo as to whether they will receive the provisional certificates for Income-tax or not. Now we have been informed by LIC HFL that the provisional certificates would be issued by HPF departments in our divisions.
  8. Difference in procedures & rules of HFL & LIC HPF: - This has led to utter chaos. To quote only three examples of the countless ones, HFL is not creating two separate accounts for husband & wife working in LIC, not allowing separate deduction, thus causing problems for claiming income-tax rebate. The restriction of loan only up to 85% of the estimate by HFL has also deprived the employees the benefit of increase in Housing loan.
       
         We may also bring to your notice that as per the extant facility some of our employees had opted to pay only INTEREST during the service and the loan amount to be deducted on cessation of service out of terminal benefits. But shockingly LIC HFL has informed every borrower an amount which purports to be revised EMI upon transfer of Loan portfolio from LIC to LIC HFL substantially altering the terms of loan such as EMI, Duration etc. The employees are under the impression that upon transfer of loan account to LIC HFL their existing terms of loan do not change and that the EMI does not increase. Employees are hoping that the EMI may actually get reduced because the extended cadre loan will get converted to cadre loan as per new limits. But LIC HFL intimation of revised enhanced EMI is a rude jolt.

  1.   In some of the Divisions the list sent by LIC HFL is not comprehensive. The names of the employees who have taken Second Housing Loan from HFL as it was not available in LIC at that time and have given now letter for conversion as per the new scheme are not appearing in the demand list. The names of the employees for whom the loans were sanctioned by LIC HFL after March 2010 are also missing in the list sent by LIC HFL.

  1.    The problems are different in nature for different employees. Some employees have taken only IEHS loan and that is to be converted. Some of the employees have taken IEHS loan and additional loan from LIC HFL as second charge. The third is as there was no facility of second Housing loan employees have taken from LIC HFL and now it is to be converted. Some of the employees have taken loan from other institutions and is taken over / to be taken over by LIC HFL.

    

   We suggest an immediate temporary solution for the subsidy problem:-

        HFL sends a consolidated demand invoice to the OS department of the designated Divisional Office authorized to remit the amounts deducted from employees' salary (@ cadre-loan interest rate) along with the subsidy amounts required (the difference in rate of interest of cadre loan and actual HFL rate). We suggest that if there are some problems in implementation of subsidy module immediately, the subsidy amount can be paid to HFL by OS department by debiting a particular code which can be later on fed in subsidy module. This can be an immediate solution to the delay in implementation of subsidy module, and can save employees from getting harassed by HFL which is demanding full amount (@ HFL interest rate) from the employees directly, and if not paid, imposing penalty over it.

        However, our considered opinion after analysing the situation & the countless traumatic experiences of the employees all over the country is that the portfolio be brought back to LIC HPF. The practical problems are so much that there is no other alternative left. We hereby reiterate our earlier demand that the portfolio of Staff Housing loan be brought back to LIC HPF & end the agony of the employees. The sooner the decision is taken, the better it would be to assuage the aggrieved employees.

Yours faithfully,


Sd/-                                         sd/-
Atul Deshpande                 Ganesh Kamath
GS, NOIW                              GS, NOINO

1 comment:

  1. I have read this post. This post is a nice one that similar to loans in chennai , loans bazaar emi calculator chennai . That I will inform about your post to my friends and all the best for your future post..

    ReplyDelete