Four local commercial banks to take part in govt housing loan scheme

KUALA LUMPUR (Oct 3): The country's four largest commercial banks have agreed to cooperate with the government to offer housing loan scheme to civil servants.

Finance Ministry Secretary-General Datuk Dr Mohd Irwan Serigar Abdullah said the government is still at the discussion stage with the banks and a concrete decision would be announced before the end of this year.

"When we outsource to the banks, we don't have to fork out RM6 billion annually... the amount we allocate for housing loans to civil servants.

"But we have to cover the difference in interest cost and the civil servants still pay 4%.

"In terms of loan, we will not make it diffcult for civil servants, on the other hand, we will enhance the borrowing process and others," he said to Bernama after an interview on the Helo Malaysia programme on Tuesday night.

Irwan said the local banks welcomed the government's decision to cooperate with them as this represents a business opportunity for them.

"The banks extremely support this as it is a business for them. Although the government servants only pay 4%, whatever surplus will be borne by the government.

"We have not determined how many banks will be involved, but for now, four banks have agreed and we will offer the other banks to participate in the scheme," he further said.

Meanwhile, asked whether the government will agree with the Congress of Unions of Employees in the Public and Civil Services (Cuepacs) that the bonus to civil servants payable this December and January 2013 be exempted from income tax, Irwan said the government will consider the request.

"If we entertain the government sector, we also have to entertain the private sector. So, this burdens the government and we need to study so that the request does not burden the government's finances," he said.

Irwan said the government has allocated RM6.6 billion to pay for the one-and-a-half months bonus to civil servants. — Bernama