Government Employees are allotted vehicles in terms of Vehicle Allotment Rules formulated by the Royal Government of Bhutan. Bank grants loans for purchase of vehicle to the Government/Corporate Employees as given below:-
| Eligibility |
- All regular and service confirmed government employees/employees of government corporations, joint corporations and other financial institutions including bank employees with a minimum monthly salary of Nu 10,000.00 will be eligible for the loan for purchase of car.
- Other employees whose monthly salary is less than Nu 10,000.00 will be eligible for purchase of two wheelers only under the scheme.
(The loan will be granted provided total deductions from the salary on account of all borrowings including this loan from the Bank as well as other sources and all deductions like Provident Fund, salary tax, health contribution and GIS deduction etc. do not exceed 60 % of gross emoluments. In other words, the loan shall not be granted if the net take home pay of any employee falls below 40 % of gross emoluments).
- An employee whose salary is less than Nu 10,000.00 will also be considered for a loan for purchase of car under the above scheme provided his/her spouse is also employed in government department/government corporation/joint corporations/FIs. In such cases the guarantee of the spouse will also be obtained as additional guarantor. Further, the loan will be granted provided total deductions from the salary on account of all borrowings including this loan from the Bank as well as other sources and all deductions like Provident Fund, salary tax, health contribution and GIS deduction etc. from the salary of both husband and wife do not exceed 50 % of gross emoluments. In other words, the loan shall not be granted if the net take home pay of both husband and wife falls below 50 % of their gross emoluments. All other terms and conditions will remain the same as per the scheme.
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| Purpose |
The loan will be granted for purchase of a new car/scooter/motor cycle for the personal use of the employee.
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| Quantum of Loan |
65% of invoice value of the vehicle being purchased or a maximum limit of Nu 1,000,000.00 whichever is lower.
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Rate of
Interest |
1 Year: 11.73%
2 Years: 11.83%
3 Years: 11.93%
4 Years: 12.03%
5 Years: 12.13%
6 Years: 12.73% (Only Foreign Vehicles)
7 Years: 12.83% (Only Foreign Vehicles) |
Repayment
Period |
The entire loan with interest should be repaid in a maximum of 84 equal monthly installments in respect of loan for purchase of Car and 72 equal monthly installments in respect of Scooter/Motor Cycle from the salary of the employee. The first installment commences from the month following the month of release of the loan.
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| Security |
- The vehicle to be purchased out of Bank’s finance should be hypothecated to the bank and the Bank’s charge should be registered in the books of the RSTA within one month of the purchase of the vehicle. The borrower will be required to furnish a copy of the Registration Book for Bank’s record after recording of Bank’s hypothecation charge therein by the RSTA.
- Third party guarantee of a regular employee from the same department having put in 3 years of confirmed service with at least equal grade of the applicant.
- Third party guarantee of the spouse, wherever necessary.
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| Margin |
25 % of the cost of the vehicle (minimum).
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| Insurance |
The vehicle should be comprehensively insured duly incorporating the Bank’s interest clause from the date of purchase of the vehicle. A copy of the insurance policy document should be submitted to bank’s branch within one month. The insurance policy should be renewed by the borrower after its expiry till the currency of the loan.
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Documents
Required |
- Salary slip and recommendation from the Employer.
- Letter of Undertaking from employer for loan instalment recovery from employees’ salary.
- In case of 2nd hand vehicle finance (vehicle should not be more than 3 years old) following documents are required:
- Sale Deed agreement between seller and buyer.
- Vehicle valuation certificate from authorised Workshop
- Comprehensive Insurance Policy document.
- Copy of Allotment Letter and Import Licence (in case of vehicle quota allotment).
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| Disbursement of Loan |
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| Inspection |
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| General |
- An employee already enjoying a loan under the existing scheme will not be eligible for a fresh loan till the existing loan is fully repaid.
- The revised loan amount is applicable to fresh applications only.
- The bank will be at liberty not to entertain recommendations for sanction of loans by such departments, whose employees existing loans have not been conducted satisfactorily and have been rendered irregular.
- Applications for loans under the scheme on the standard forms duly filled in and completed in all respects should be sent by the concerned departments/organizations to the Bank’s branch at the center where the applicant employee is posted.
- An irrevocable letter of authority from the applicant to his employer for deduction of installments at source and a letter from the employer agreeing for the same should be submitted along with the loan application as per Annexure II & III respectively.
- Proof of income: Latest salary slip with authorized signatory should be submitted along with the loan application.
- Photo copies of ID cards of the applicant/surety should be attached with the loan application form with 2 copies of recent photographs each.
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| Inspection |
The employer organization will be primarily responsible for: -
- Authentication of particulars of applicant and surety incorporated in the application forms and recommending the loan for sanction.
- To ensure recovery of the loan installments of its employees from their respective salaries and depositing the same with the Bank’s branch regularly every month.
- Recovery of installments/ balance of dues from the salary of the surety in case of any default / non availability of borrower’s salary for deduction for any reason whatsoever.
- Incorporating the particulars of employees Bank loan deduction in the last pay certificate in the event of transfer of an employee to other department/ organization to which the scheme is applicable.
- Recovery of entire loan outstanding with up-to date interest from the terminal benefits of the employee in case of retirement, resignation, dismissal or cessation of service for any other reasons.
- For payment of balance dues of an employee from its own resources in case the loan is not fully liquidated from the recovery of the employees salary/ terminal benefits or those of the sureties.
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For further information, please contact our nearest branch or the Credit Department at Head Office, Phuentsholing
