Karachi February 24 2022: In addition to the exposures allowed, State Bank has decided to allow counting of Wholesale lending of banks to microfinance providers and housing finance companies for onward financing under Naya Pakistan Low Cost Housing (NPLCH), one of the three component of Kamyab Pakistan Program (KPP) as a
exposure of banks towards achievement of their housing & construction finance mandatory targets.
Earlier, SBP has allowed (i) direct financing to/or investments in bonds/TFCs/Sukuk issued by Real Estate Investment Trusts (REITs) Management Companies, (ii) Investments in units/shares issued by Real Estate Investment Trusts (REITs) subject to compliance with all other applicable regulations, (iii) investment in Sukuk/bonds issued by Pakistan Mortgage Refinance Company (PMRC), however, investment in PMRC’s Sukuk/bonds and amount of refinancing availed from PMRC shall be netted off towards counting the mandatory target and (iv) Financing to MFBs for extending housing finance to eligible borrowers to the extent of actual disbursements by MFBs. Banks extending financing to MFBs for housing finance will have to report such transactions to SBP separately towards the counting of mandatory requirements.
However, the above exposures will be considered on aggregate basis up-to a maximum of 15% of mandatory targets for housing and construction finance of a bank/ DFI on a given date.
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.
