According to a circular published by SBP on Tuesday, a state bank of Pakistan (SBP) has decided to impose penalties on banks if they fail to meet the essential conditions for houses and disbursement.

Read more: Banks establish informal approaches for low-cost housing financing

“With effect from July 31, 2021, a penalty will be levied on banks that fall short of their Government’s Mark-up Subsidy Scheme (G-MSS) targets, on both targets of several housing units as well as units & number of disbursements,” SBP said.

According to a circular published by SBP on Tuesday, a state bank of Pakistan (SBP) has decided to impose penalties on banks if they fail to meet the essential conditions for houses and disbursement.

“With effect from July 31, 2021, a penalty will be levied on banks that fall short of their Government’s Mark-up Subsidy Scheme (G-MSS) targets, on both targets of several housing units as well as units & number of disbursements,” SBP said.

“A baseline penalty will be assessed on shortfalls from cumulative targets until July 31, 2021, while a larger penalty will be charged on shortfalls from following months’ targets,” SBP said in a statement released on Tuesday.

It appears that banks are still hesitant to grow their low-income housing lending portfolios. The government’s main action plan was to create 10 million employment and 5 million low-income housing units, however after three years, there has been little visible progress. According to reports, the county is facing a ten-million-house shortfall.

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