Karachi: The State Bank of Pakistan (SBP) on Wednesday (December 01) revised the exposure limit up from 15% to 25% to increase the housing finance limit for commercial banks, news sources reported. For the second time this year, the target has been updated to strengthen the ability of Development Financial Institutions (DFI) to issue loans to residential and non-residential development projects.
As per reports, in addition to the objectives established for each bank, the central bank has requested a precise schedule from DFIs in order to meet the housing finance targets. These goals include the number of housing units distributed and the amount of housing credit disbursed. Furthermore, the SBP permitted banks to invest in Sukuk bonds, Real Estate Investment Trusts (REITs) management companies, and REIT-issued shares. Banks would also be able to raise cash by investing in bonds issued by the Pakistan Mortgage Refinance Company (PMRC).
The total amounts generated will thus be tallied against the established 25% threshold. In recent years, the SBP has developed a number of policies and regulated banks to enhance housing sector financing. In July, the SBP issued an order requiring banks to devise mechanisms for funding as well as meet 5% statutory targets or face penalties under the Banking Companies Ordinance, 1962.
Nauman Ahmad is an imaginative Pisces whose love for literature and nature is unparalleled. When he's not reading or hiking, he's sleeping and eating, which gives him plenty of energy for his next adventure.
