Karachi: The State Bank of Pakistan (SBP) issued a notification to various presidents of commercial banks on Wednesday, mandating them to allocate 5% of their loan portfolios for housing and construction finance by December 2021, according to news sources.
As per the official circular, the SBP also stressed for the government to achieve this objective by the passage of foreclosure law and land record digitalisation ‘for the facilitation of clean title for bank lending’. The circular is issued in wake of the federal government’s decision to construct 100,000 houses for low-income families – under the Naya Pakistan Housing Programme (NPHP).
Bank officials have expressed concern that the foreclosure law is still to be approved and achieving clean title for the state is an ‘unrealistic goal’ – owing to the fact that the majority of the property in Pakistan does not possess a clear title.
As per the SBP, the mortgage loans were mandated under the Section 25 of Banking Companies Ordinance, 1962. However, the penalties for non-compliance have not been yet defined. Also, the SBP has ordered the banks to devise an action plan within 15 working day – including quarterly targets, products’ development, media campaigns, technology infrastructure, capacity building and other aspects.
Moreover, the banks have been asked to report data of loan approvals and disbursements against their targets starting from September, on a monthly basis.
Hazafa reveres the art of writing and has been turned into a property enthusiast by profession. Her daily survival kit includes; tea, coffee, keyboard and paperbacks.
