AIUBEA urges Union Bank Management to continue interest free loan facility for staff to pay insurance premiums
The All India Union Bank Employees’ Association (AIUBEA) has requested Union Bank of India to continue the interest-free loan facility given to employees for paying insurance premiums under the Staff Loan Insurance Scheme.
The union has written a letter to the bank’s Chief General Manager and expressed concern over the delay in implementing the decision for the current year.
The union explained that the Staff Loan Insurance Scheme was introduced in April 2021 after discussions between the bank management and employee representatives.
Under this scheme, insurance premium is charged on staff loans taken by employees. The premium amount is deducted from employees’ accounts in one go during the month of April, which creates financial pressure on many employees.
When banks sanction a loan, the property against which the loan is given is insured. For example, in the case of a home loan, the house is insured, and in the case of a car loan, the car is insured. The loan borrower has to pay the insurance premium.
To reduce this burden, the bank had been providing an interest-free loan equal to the premium amount recovered from employees.
This helped employees manage their finances easily without paying additional interest. According to the union, this facility has been given continuously for the last four years.
AIUBEA said that during recent discussions for continuation of the insurance scheme for 2026-27, it was mutually decided that the bank would continue the interest-free assistance this year also. However, even after the decision was taken, the bank has not implemented it yet.
The union claimed that the bank may now be planning to stop the facility without proper discussion with employee representatives. The association said such a step would go against the agreement reached earlier and may create hardship for employees.
The union has urged the bank management to honour the earlier decision and continue the interest-free loan facility for employees as done in previous years.
