The State Bank of Pakistan (SBP) has introduced a mechanism to incentivise banks to meet their mandatory targets with regard to extending mortgage loans and financing to developers and builders. In a statement issued on Wednesday, the central bank pointed out that the mechanism also penalises banks for any shortfall in meeting the target. The move builds upon an earlier measure of the central bank where it set a mandatory target for banks for extending mortgage loans and financing to developers and builders, it said. It is pertinent to mention that banks do not earn any return on the CRR, the central bank said. The SBP reaffirmed that it has been actively working with banks to support financing for the promotion of housing and construction of building activities in the country.

Source: The Express Tribune October 08, 2020 03:10 UTC