Loans & Advances


With effect from 14.09.2016, we have implemented the Central Bank of Kenya guidelines as per circular No.4 of 2016 dated 13.09.2016 and the maximum rate of interest applicable on advances will be four percent over CBR.

Central Bank of Kenya has revised Central Bank Rate (CBR) to 11.25% p.a. with effect from 5th Dec 2024. Hence, our Rate of Interest on KSH Loans/Advances based on these floating rates will accordingly get revised for existing A/Cs linked to CBR.

The Bank gives hassle free loans for all your requirements at very competitive rates of interest. Loans are instantly given against our Term deposit receipts. We also give loans against deposit with any branch of Bank of India in India or globally subject to regulations of the respective countries.

Pursuant to Government of Kenya Circular No. 15 of 2019 dated 26.11.2019 advising repeal of Interest Rate Cap under section 33B of the Banking Act, Bank of India has introduced the Bank-Base Rate (Risk Based Pricing) for the new loans. Following the decrease in CBR by Central Bank of Kenya, Bank of India wishes to notify the customers/stakeholders that the Base Rate on Loans and Advances denominated in Kenyan Shillings is proposed to be decreased from 16.00% to 15.50% w.e.f 10.01.2025.

Loans & Advances

I) Title of the Scheme -
Our Scheme for Housing Finance is known as “Star Home Loan Scheme”.

II) Purpose of Loan :-

  • To purchase/construct house/flat on ownership basis.
  • To renovate/extend/repair existing house/flat.
  • To purchase a plot of land and construction of house (Only composite loan) .
  • To acquire household articles along with the house/flat – for furnishing the house/flat.

III) Eligible – Borrowers:-
The Scheme is targeted to attract select customers who are –

  • In permanent salaried employment; or
  • professionals like Doctors, Lawyers, Engineers, etc.; or
  • self-employed persons having regular income; and/or having any other regular source of income.
  • Corporate borrowers or other corporate entities for extending finance to them for purchase or construction of dwelling units for their employees.
  • Proprietary firm / Partnership firm / corporate borrowers.

IV) Age : Repayment Period for salaried persons as well as others : Up to the age of 70
Years. Age mentioned above is the outer limit i.e the age by which the repayment period should be over. It is not an entry age.

V) Income

  • For Salaried : Latest Annual Salary Certificate, Monthly Salary slip for 3 months from employer showing name, designation, details of deductions from salary and copies of income tax returns for last 3 years.
  • In case of businessmen: Copies of financial statements (preferably audited) and Income Tax Returns for last 3 years.
  • Family members can be taken as co borrowers to meet income/EMI criteria as per details below:-

a.In case owner of property is male: Wife, parents, sons, daughter-in-law
b.In case owner of property is female: Husband, parents of husband, sons, daughter in law.

VI)Margin:-

Quantum of Loan Margin* on Home Loan for 1st Home Margin for 2nd or subsequent house [with our without existing home loans]
UptoKsh 25.00 Mn 20% 30%
Over Ksh 25.00 Mn to KES 100.00 Mn 25% 35%

VII) Net Take home Pay/Income (NTH):
In respect of home loan to individuals: Net take home pay/income (Net of EMI of proposed loan) is stipulated as under:-

For Individuals %
Gross Monthly Income upto Ksh 100,000/- 40%
Gross Monthly Income over Ksh 1,00,000/- uptoKsh3.00 Mn 30%
Gross Monthly Income over Ksh 3.00 Mn 25%
For Firm / Corporate DSCR- 1.5

VIII) Quantum of Loan: (Ksh In Mn)

Purpose Min.Limit Max.Limit
i. Construction/Purchase of a house/flat – 5.00 100.00
ii. For purchase of a plot 5.00 25.00
iii. For addition/extn./repair/ renovation of house/flat 5.00 50.00
iv. Furnishing of house/flat, Solar PVs [15% of Home Loan]. *2.00

IX) Calculation of Quantum of Loan :
Calculation of Quantum of Loan is linked to the Income of Proponent/borrower as mentioned below :-

Category Quantum of Loan
Salaried Employees : 72 times of gross monthly salary OR 6 times of gross annual income based on Income Tax Returns;
Self-employed/Professionals Individuals engaged in Trade/ Commerce/ Business : 6 times of their gross annual income based on Income Tax Returns;
Prop. FirmPartnership firm/Corporate Borrowers : 6 times of cash accruals (PAT + Depreciation) as per their audited Balance sheet/P&L A/c.

X) Repayment*

Sr.No Particulars Repayment Period
1 For new Construction / New Purchase from builder Normal Repayment Period -20 Years including moratorium period upto 24 months.
2 For 2nd/3rdPurchase 20 Years Including moratorium period of 24 months.
3 For Repair/Renovation /Addition /Alteration 10 Years

XI) Security:

Legal mortgage of the land/flat/house proposed to be financed, guarantee of spouse if he/she is not a co borrower, consent from the spouse for creation of charge over the property .

XII) KYC Norms:- As per CBK guidelines

XIII) Rate of interest:
For Individuals:-
For limits in KSH- Base Rate +0.00%pa
For limits in other currencies- Applicable 3M/6M USD/EURO/GBP Libor+ 6.00%pa
For Others:- Risk Based Pricing

XIV) Processing charges:
One time 1.00%pa

XV) Other costs:- External costs like cost of valuation, legal cost , insurance, stamping
etc. to be incurred by the borrower separately.
*Other terms and conditions apply

Loans & Advances

1. PURPOSE:

  • To meet the credit needs of trade, commercial activity, other general business/ profession, as also for their bona fide requirements;
  • To meet educational expenses of family members including near relatives;
  • To undertake repairs/renovation/extension to the residential/commercial property;
  • To purchase / construct residential house / flat, purchase of a Plot of land for construction of house/premises for business/commercial use against property already owned by the proponent;

2. TARGET (ELIGIBLE) CUSTOMERS:
People engaged in trade, commerce and business, professionals, self-employed, individuals with high net worth, salaried people, proprietary firms, Partnership firms, Companies (Pvt. /Public Ltd.,)

INELIGIBLE PERSONS :
NBFC, Trusts are not eligible for advances under the scheme.

3.MAXIMUM AGE LIMIT:
Individuals in permanent service and others max. 60 years (age limit is the maximum age at the end of the repayment Period; It means the entire loan is to be liquidated by the above age. It is not an entry age).

4. TYPE OF ADVANCE :
(a) Demand / Term Loan (Repayable by installments);
(b) Overdraft (Reducible limit as per repayment schedule);
(c) Overdraft (Non-Reducible-For other than individuals)

5. QUANTUM OF ADVANCE : (Ksh in Mn)

- Business purpose Other bonafide purposes
Min. Max. Min. Max.
Demand Loan / Term Loan 10 100 1 20
Overdraft (Reducible) 10 100 1 20
Overdraft (Non-Reducible) 10 100 - -

6. CALCULATION OF QUANTUM OF ADVANCE

QUANTUM OF ADVANCE
1) Individual-Salaried/ Self-employed/ Professionals / Traders. 48 times of average monthly net emoluments (take home salary) based on salary slip OR 4 times of net annual income with other rental income from property etc. based on KRA returns for last 2/3 Financial Years.
2) Others i.e. Prop./Partnership firm/Company etc. For Loans/ Reducible Overdraft : 4 times of average net annual income of last 2/3 years based on IT Returns for last 2/3 Financial Years or 4 times of average cash accruals(Profit after tax + depreciation) for last 2/3 years, as per their Balance Sheet/P&L Account for last 2/3 financial years. For Overdraft( Non reducible) 20% of annual turnover based on last (F.Y)audited balance sheet of the proponent. Balance sheet to be obtained for last 2/3 Years.-based on its number of years existence.

7. MARGIN (ON VALUE OF PROPERTY) :
The loan limit will be based on valuation of property (Market value, Distress Sale Value, Forced Sale Value) , 60% margin on market value / 50% of distress value or 40% of forced sale value , whichever is lower.

8. REQUIREMENT OF NET TAKE HOME PAY /DSCR- FOR LOANS :
a) For individuals: Net take home pay (net of EMI of proposed advance) is not less than 40% of gross income of the applicant.
b) For Prop. Firm/Partnership Firm/Company(Loan /Reducible OD): DSCR: Min.1.5;
c) For Overdraft facility(Non-reducible ) :ISCR Min.1.5.

9. REPAYMENT :

REPAYMENT
For loans (Repayable by installments) Within a period of max. 10 years by way of equated monthly installments (EMIs) (including the moratorium period, if any). The repayment should commence from the month subsequent to the month in which final disbursement is made or 6 months from the date of first disbursement, whichever is earlier.
Overdraft : (Reducible Limit) Interest to be serviced on monthly basis, as per sanction terms; Drawing Limit to be reduced on monthly basis as per sanction terms to bring down the balance to zero at the end of repayment period. Total Repayment period of max. 10 years.
Overdraft: (Non-reducible) Interest to be serviced on monthly basis, as per sanction terms.

10. SECURITY :

  • Legal mortgage charge over the property (The property offered should be a residential or a commercial building or a plot of land (residential/ commercial) and the property to be mortgaged should be in the name of the applicant or his/her spouse or close relative or between persons representing relationship such as firm/proprietor or partnership/partners, company /directors.
  • The person /entity in whose name the property to be mortgaged stands should be taken either as co-borrower or a guarantors;guarantee of spouse if he/she is not a co borrower, consent from the spouse for creation of charge over the property .
  • Guarantee of spouse if he/she is not a co borrower, consent from the spouse for creation of charge over the property .

11. KYC Norms:- As per CBK guidelines

12. Rate of interest:
For Individuals:-
For limits in KSH- Base Rate +0.00%pa
For limits in other currencies-Applicable 3M/6M USD/EURO/GBP Libor+ 6.00%pa
For Others:- Risk Based Pricing

13. Processing charges: One time 1.00%pa

14. Other costs:- External costs like cost of valuation, legal cost , insurance, stamping
etc. to be incurred by the borrower separately.
*Other terms and conditions apply

 
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