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050329

STATE BANK OF PAKISTAN - BANKING POLICY DEPARTMENT

BPD Circular Letter No. 13 of 2005
March 29, 2005 


The Chief Executives,
All Banks/DFIs

Dear Sirs/ Madam,

Please refer to the Prudential Regulations on Consumer Financing issued by State Bank of Pakistan.
2. The following clarifications regarding Circular No 32 of 2004 on “Housing Finance” may be noted;
The banks/DFIs may allow Housing Finance Facility for construction of houses against the security of land/plot already owned by their customers. However, the lending bank/DFI will ensure that the loan amount is utilized strictly for the construction purpose and loan is disbursed in tranches as per Construction Schedule.
Loans against the security of existing land/plot, or for the purchase of new piece of land/plot, for Commercial and Industrial purposes may be allowed. But such loans will be treated as Commercial Loans, which will be covered either under Prudential Regulations for Corporate/ Commercial Banking or Prudential Regulations for SMEs.
3 Other instructions on the subject will, however, remain unchanged.
4. Please acknowledge receipt



Yours faithfully,

S/d
(MUHAMMAD ASHRAF KHAN)
Sr. JOINT DIRECTOR
 

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