Grant of Interest Free Loans to Government Servants Who Don’t Receive Interest on Provident Fund Deposits

According to Sl. No. 5 of ESTA CODE & Finance Division O.M.No.F.6(1)-R-8/74 dated 18-10-1975, there is facility of Grant of Interest Free Loans to Government Servants Who Don’t Receive Interest on Provident Fund Deposits. Detail is as under:

Under the existing rules, interest is not credited by Government to the Provident Fund Account of a Muslim subscriber if he does not wish to receive it. The question of the grant of interest free loans to such subscribers had been under consideration of the Government for some time past. It has now been decided that no interest may be charged by Government on the house building advance and conveyance advances drawn by a Government servant whose deposits in the Provident Fund account carry no interest, subject to the following conditions:-

(i) The Government servant has not received interest on his Provident Fund accumulations prior to the drawal of the advance from the Government;

(ii) The interest to be remitted under these orders shall not exceed the amount of interest foregone by the Government servant concerned on his Provident Fund Account upto the date on which the interest on Government loans would become due for payment;

(iii) If at any time in future the Government servant who has availed himself of this concession chooses to take interest on his Provident Fund deposits, he will be required to pay in full to the Government the amount of interest accrued on the advance drawn by him from the Government.

  1. The above decision will also be applicable in the case of Government servants who have already drawn advances from the Government but the recovery of interest charges accrued thereon has not been made from them.

View Comments (15)

  • Madam I am teacher of government of sindh can l receive above mentioned advance any one

    • Dear Khan Muhammad Every Govt Grants to its employees these advances in the shape of HBA, MCA, Cycle Advance etc.

  • I am a government employee how can i apply for the said loan and which bank would give interest free loan to the government employees?

  • May Allah bless you for creating such a supporting site for all govt employees. I am asking you about an issue to kindly guide me whether Motor Car advance is admissible to BS-17 & above only OR it is admissible on the basis of basic pay i.e. Rs. 40,000/- onward. Your kind guidance would be highly appreciated.

    • Dear Khan for the Federal Government Employees there is no condition of BPS even a lower grade employees having the required basic pay can get it.

  • Thanks for your expeditious reply can you provide me the copy of the letters declaring that Motor car advance is on the basis of basic and not BS-17, I shall be highly thankful.

  • Does Govt of the Punjab offer HBA facility to its employees... Urgent response is requested please

  • Dear

  • Working in BS-17, in Federal Govt.

    When I applied HBA I was getting interest in my pay from GP Fund. ..... But 3-month before sanctioned of HBA .... I applied interest free GP Fund and got a interest free Pay Slip before getting HBA fund ........ and AGPR issued me interest free pay Slip.

    After that i got HBA ..........So what should be treatment of Interest on HBA ..... will i pay interest or not even then I drawal/sanctioned after 3-months of interest free pay slip from AGPR .........

    Plz also tell me how long period required for interest free HBA ..................

    ... plz plz tell me with reference or example thx