Karachi January 22 2022: With a view to further promote housing and construction finance, banks are advised to increase their financing for housing and construction of buildings (Residential and Non-Residential) to at least 7 percent of their respective domestic private sector advances by December, 2022.
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Current Account Deficit Crossed USD 9 Billion in First Half of Fiscal Year 2022: SBP
Earlier the banks were advised by SBP to achieve mandatory targets equivalent to 5 percent of their domestic private sector credit by December 31, 2021, for financing to housing and construction of buildings (residential or otherwise).
As a result of these measures, financing for house building purposes witnessed the largest jump in the personal loan category, as it increases by whopping 70 percent or PKR 58 billion on year-on-year basis to reach PKR 144 billion in 2021.
Still advances for housing and construction finance of PKR 144 billion are 1.9 percent of the overall PKR 7,598 billion domestic advances made by the domestic banks. In order to meet with the central bank requirement banking sector have to lend an amount of PKR 388 billion at current advances.
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Monetary Policy Committee Will Decide About Policy Rate On Monday: SBP
SBP doubles the penalty as banks falling short of their quarterly financing targets, as approved by the State Bank, will maintain, over & above the standard Cash Reserve Requirement (CRR), an additional CRR, in the next quarter, by the amount equivalent to two times of the shortfall in achieving financing target, as of relevant quarter end vis-à-vis that of corresponding quarterly target approved by the State Bank.
The banks fulfilling or exceeding their quarterly financing target, as approved by the State Bank, will maintain a lower CRR, in the next quarter, by an amount equivalent to incremental outstanding financing as of relevant quarter end, for the housing and construction of buildings vis-à-vis that of outstanding portfolio as of June 30, 2020
Earlier the banks falling short of their quarterly financing target, as approved by the State Bank, were required to maintain, over & above the standard CRR, an additional CRR, in the next quarter, by the amount equivalent to deficit in achieving financing target, as of relevant quarter end vis-à-vis that of corresponding quarterly target approved by the State Bank.
