Patna, June 20: The state on Wednesday signed a memorandum of understanding (MoU) with State Bank of India (SBI) to provide home loan at cheap rates to three lakh government employees.

According to the agreement, the bank would provide loan amount up to Rs 30 lakh to the employees at a cheap rate for 30 years. The bank would not charge any processing fee for sanctioning the loan, while those availing the loan have to pay the lowest equated monthly instalment (EMI) of Rs 890 per lakh.

The MoU was signed by finance department principal secretary Rameshwar Singh on behalf of the state government and SBI’s Patna zone chief general manager Jeevandas Narayan in the presence of deputy chief minister Sushil Kumar Modi. A host of other bank officials, including SBI managing director A. Krishna Kumar, was present on the occasion.

“The MoU will be a boon for the government employees in getting home loans at a cheap rate. Besides, the loan would be free of hassles because the government has given the guarantee to the bank for the loans,” Modi said while exhorting the employees to avail the scheme.

Lauding the SBI’s efforts in extending loans for promoting construction sector, Modi, who is also in charge of the finance department, said of the total Rs 770 crore housing loan sanctioned to 12,039 people in 2011-12, the largest public sector bank had disbursed loans to 4,648 people worth Rs 241 crore without having any kind of MoU in place.

Modi suggested the bank officials to initiate a campaign through agents who can persuade and promote the government employees to take benefit of the agreement.