Banks set to launch schemes to tap pay commission bonanza
The national banks of the country, including State Bank of India are about to launch schemes and programs to encourage government employees to take more loans from them. They are planning on coming up with schemes that will be designed in a way that the government employees are attracted in taking more loans and then spend on consumers goods on keeping in mind of the pay rise mentioned in 7th Pay Commission.
|1||Aim||To Increase Loan Amount for Government Employees|
|2||Motive||To Focus on Bank’s Retail Growth|
|3||Reason behind the New Loan Schemes||Implementation of 7th Pay Commission Recommendation|
|4||Revised marginal cost of lending rate (MCLR) of SBI||9.10%|
|5||Revised marginal cost of lending rate (MCLR) of IDBI||9.65%|
|6||Interest rate reduced by PNB||0.05%|
|7||Implementation Date||August 01, 2016|
New Loan Schemes
It is being said that State Bank of India is all set on launching loan schemes with more time for loan repayments and also with lower interest rates. They are currently working out on schemes which will have more flexibility in paying installments, and in the time period of the loan pay back as well. Under this scheme home loans will be given at lower interest rates when paid through salaries directly, and also the provision of paying back the loan can be done from the existing age to the age of 75, which was previously 70 years.
Apart from this, Shaurya scheme of State Bank of India which will be launched in nearby future. There will be a special scheme for the defense officials who have benefited in terms of higher salaries and pensions.
Not just State Bank of India, it also being said that Punjab National Bank is also keen on launching schemes which would be designed to attract the employees who have been benefited from the 7th Pay Commission. They are of the view that there will be a rise in expenditure that the government employees make on retail. So with this wage revision the bank is planning on making certain changes to the existing loan schemes.
Steps Taken by Banks to boost retails growth
Banks like IDBI and Bank of Baroda are making changes in their schemes and also coming up with new schemes. IDBI has announced that their base rate will be reduced from 9.75% to 9.65%. Bank of Baroda is also keen on coming up with attractive schemes on personal loans and cars loans.
All these plans and scheme of the banks have started to come up after the government announced that from August the government employees will be given a hike in the salaries and also an arrear of the first seven months. It was seen after the award of Sixth Pay Commission that the sales of two wheelers and cars had risen. So now after the 7th Pay Commission award as well the banks are expecting a rise in the sales of various consumer products.
Even though this time the increase in the pension and salary is 15% (last time it was a 40% hike), the banks are assuming that the government employees would still spend a little more on consumer goods like home, cars, and others in the coming few months.