Circulars/Notifications / Infrastructure, Housing & SME Finance Department

IH&SMEFD Circular No. 10 of 2020 July 15, 2020

The Presidents/Chief Executives,

All Banks

Dear Sir(s)/Madam(s),

Mandatory Targets for Housing and Construction Finance

1. With a view to promote housing and construction of buildings (Residential and Non-Residential) in Pakistan, State Bank of
Pakistan (SBP) has decided to advise mandatory targets to the banks. Accordingly, each bank shall ensure that the financing for
housing and construction of buildings (Residential and Non-Residential) shall be at least 5 percent of their domestic private sector
credit by December, 2021.

2. Banks are advised to gear up their infrastructure and capacity to ensure compliance of meeting these targets. Accordingly,
each bank is required to develop a concrete action plan with detailed measures and their timelines to achieve its housing and
construction finance targets. This action plan should contain breakdown of overall targets into quarterly targets, development of
suitable products, launching of media campaigns, development of internal technology, capacity building of staff, and other actions
needed to ensure the 5 percent target is met. Banks are advised to submit their concrete action plans to this department within
15 working days from date of issuance of this Circular. Banks will be required to report data of approvals and disbursements
against these targets on monthly basis starting from September 2020.

3. SBP will keep a close monitoring of progress on the mandatory targets. Non-compliance in meeting the targets shall attract
punitive action under the relevant provisions of the Banking Companies Ordinance, 1962.

Yours sincerely,

(Dr. Mian Farooq Haq)

Director

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