ADVANCES IN RAILWAY

Rules governing the grant of various Advances and withdrawals permissible to railway
servants from the Consolidated Fund of India and Provident Fund are given in the Indian
Railway Administration and Finance and Indian Railway Establishment Code Vol. I
respectively. Details regarding the grant of advances from the Consolidated Fund of India are
given below for guidance.

Interest Bearing Advances:-

HOUSE BUILDING ADVANCE (HBA):

 The total amount of advance that a Central government employee can borrow is up to 34
months of the basic pay subject to a maximum of Rs. 25 lakh, or cost of the house, or the
amount according to repaying capacity, whichever is the least for new
construction/purchase of new house/flat.
 The HBA amount for expansion of the house is capped at Rs.10 lakh or 34 months of
basic pay or cost of the expansion of the house or amount according to repaying
capacity, whichever is least.
 The methodology of recovery of HBA shall continue as per the existing pattern recovery
of principal first in the first fifteen years in 180 monthly installments and interest
thereafter in next five years in 60 monthly installments.
 The cost ceiling limit of the house which an employee can construct/ purchase is Rs.1.00
crore with a proviso of upward revision of 25% in deserving cases. There is a provision
for individuals migrating from home loans taken from Financial Institutions/ Banks to
HBA, if they so desire.
 5. Both spouses, if they are central government employees are eligible to take HBA either
jointly, or separately.

COMPUTER PURCHASE ADVANCE:- (RBE NO. 10/2017)

Advance Quantum Eligibility Criteria

Rs, 50,000/- or actual price of
Personnel Computer Advance All Government Servants
PC, whichever is lower

 The Computer Advance will be allowed maximum five times in the entire service.

 Recovery – Not more than 150 installments from the subsequent months’ pay after
drawing the advance.
 Subsequent advance – 3 years after the date of previous withdrawal
 PURCHASE OF SCOOTER/MOTOR CYCLE/MOPED

 Amount – Rs.30000 or 4 months pay or anticipated price whichever is the least.

 Second or subsequent advance - Rs.24000 or 3 months pay or anticipated price whichever is the
least. Second/subsequent advance is not permissible unless earlier vehicle is sold. Amount of
advance will be less the profit earned on selling the earlier vehicle.
 The employee should produce Registration Certificate of the vehicle on his name within
specified period.
 Rate or interest – 8% per annum.
 Recovery – Not more than 70 installments from the subsequent months’ pay after drawing the
advance.

PURCHASE OF MOTOR CAR

 Amount – Rs.1,80,000 or 8 months pay or anticipated price whichever is least.

 Second or subsequent advance - Rs.1,60,000 or 8 months pay or anticipated price whichever is
the least. It shall be granted only after 4 years from date of withdrawal of last advance.
Restriction of 4 years does not apply in following cases: I) Where advance allowed earlier was
for Motor cycle and now it is for car. II) Where Railway employee dispose his car in India prior
to his posting/training/deputation abroad more than one year and returning to India without
car. III) Where he is appointed to a regular post abroad and does not take his car along with
him.
 Second/subsequent advance is not permissible unless earlier vehicle is sold. Amount of
advance will be less the profit earned on selling the earlier vehicle.
 Conditions - The employee should produce Registration Certificate of the vehicle on his name
within specified period. Competent authority should be satisfied about the repaying capacity of
the employee. Mortgage agreement should be executed before withdrawal of the advance.
 Rate or interest – 11.5% per annum.
 Recovery – Not more than 200 installments starting with the subsequent months’ pay after
drawing the advance.

INTEREST-FREE ADVANCES

Name Amount Eligibility Comments

Amount is
recoverable in a
Grade Pay (GP) less
Bicycle advance Rs.4,500 maximum of 30
than or equal to Rs.2,800
monthly
installments

All Group C employees Amount is

Advance for warm who have been posted recoverable in a
Rs.4,500
clothing at hill stations. The maximum of 12
appointment should monthly
 Name Amount Eligibility Comments

either be the first one or installments

a transfer. The duration
of the appointment
should not be less than
1 year.

Amount is
All employees who
Pay for 1 month or 2 months recoverable in a
Advance on pay at have been transferred
in the case of a transfer due maximum of 3
the time of transfer from one headquarter to
to shift of headquarters monthly
another
installments

Advance on
The amount will be enough The advance
travelling All situations where
to cover the employee’s will be adjusted
allowance for tour, travelling allowance is
travelling expenses for a when the tour
retirement, or provided
month or 6 weeks is completed
transfer

Advance on
travelling The amount is limited to
Same as that for transfer
allowance for the 3/4th of the expenses
or retirement
family of a admissible
deceased officer

Advance of Leave
All government
Travel Concession Up to 90% of the travel fare
employees
(LTC)

An amount that does not

exceed the net leave salary
amount. This includes
allowances for the first 30 The amount is
Advance of leave days of the leave. This All employees on leave adjusted
salary amount is arrived at after the for 30 days or more against the
deduction of Provident Fund monthly salary
contribution, house rent
allowance, income tax, and
recovery of advances

90% of the deal for All Central Government

Advance for predefined major illnesses. employees. The benefit
medical treatment Rs.10,000 is offered for is not offered to railway
indoor treatment of cancer employees
for a period of 3 months or
 Name Amount Eligibility Comments

lesser. Rs.36,000 is provided

for the treatment of TB when
the treatment duration
exceeds 3 months

Advance for This amount is

natural calamities recoverable in a
Non-Gazetted
that include Rs.7,500 maximum of 12
employees
droughts, floods, monthly
cyclones, etc. installments

Central Government
Advance for
employees who avail
availing Hindi
the training through a
training through a Rs.450
course conducted by the
correspondence
Central Hindi
course
Directorate

This amount is
recoverable in a
All Central Government
Lawsuits advance Rs.500 maximum of 24
employees
monthly
installments

 The amount for most of the interest-free advances were relatively low. Since the salary
packages of employees were increasing, these advances did not seem to be very
lucrative. Hence, there were demands to increase the interest-free advances so that they
stand at three times the regulated value.

Interest-bearing Advances
Interest
Amount installment
Description Eligibility (Basic pay) rate per
Whichever is less will be paid in months
annum
Rs.1,80,000 OR Having pay of Rs. 19530 or
1. Motor Car 11.5
Rs. 8 months’ Pay + DP OR more, excluding grade pay, 200
(+2.5)
Price of the Vehicle per month in pay band
Having pay of Rs.19530 or
2. (a) Rs. 50,000 OR 11.5
more, excluding grade pay, 150
Computer Rs. Price of the PC (+2.5)
per month in pay band
Pay of Rs.8560 or more,
2. (b) Rs. 30,000 OR 11.5
excluding grade pay, per 150
Computer Price of the PC (+2.5)
month in pay band
 Rs.30,000 OR Pay of Rs.8560 or more,
3. Scooter 4 months’ Pay + DP OR excluding grade pay, per 8.5 (+2.5) 70
Price of the Vehicle month in pay band
Rs. 20,000 OR Having pay below 8560
4. Moped 4 months’ Pay + DP OR excluding pay per month in 8.5 (+2.5) 70
Price of the Vehicle the pay band

34 month’s pay in the pay band

subjected to a maximum of 1.80
lacs or cost of enlargement or
Adv. Int.
repaying capacity, whichever is
up to (in
least. 240
5. House lakhs)
The cost ceiling limit shall be 134 Principal=1
Building Permanent employees 0.50 5.0
times the pay in the pay band 80
Advance 1.50 6.5
Subject to a minimum of Rs. 7.50 Interest= 60
5.00 8.5
lacs and maximum of Rs. 30 lacs
7.50 9.5
Relaxable up to a maximum of
25% of the revised maximum cost
ceiling of Rs. 30 lacs.