No, No actually what I interpret is that he means that a Houging Loan can be a Normal Housing loan as a customer on market rate or a Staff Home Loan (to an employee) on concessional Rate of Interest.
His is case of - although he is a staff but he has not availed the concessetional staff home loan but a Normal Home Loan at Market Rate (whthout staff concession, and before joining the bank).
The situation here is that the loanee is both staff as well as customer to the bank.
So, what complications can it create, this may be elaborated by experts of this forum.
I also want to discuss a case that if a bank staff takes Staff housing loan (on concessional interest rate) which was sanction and disbursed to him being a staff member. Later on if he resigns or the bank (employer) terminates him.
The in that case-
1) as per service conditions all dues to the bank has to be cleared on resignation / termination.
2) As per Loan agreement clause his Concessetional Staff loan will be converted to normal Housing Loan at market rate (as available to any other customer).
The employee does not want to close the loan ac by paying back the entire amount (as so much finance is not immediately available to him). But continues to pay him all EMIs on time.
In such case, can the bank invoke SARFACEI Act, 2002, issue a notice for recall of loan and auction his property ? Whether Service condition will prevail over loan agreement clause, or the vice versa may apply and the employee will have option to continue paying EMI at the new (market) rate of interest.