The Finance Division has proposed to the federal cabinet declare the Securities and Exchange Commission of Pakistan (SECP) as a regulator of Credit Guarantee Trust Fund (CGTF) to fulfill the requirement of No Objection Certificate (NOC) for issuance of registration certificate for housing Finance.
Sources told ProPakistani that the cabinet on Tuesday (today) is likely to approve declaring SECP as a regulator of CGTF to fulfill the requirement of NOC for issuance of registration certificate.
Sources said that Pakistan Mortgage Refinance Company Limited (PMRC) has been set up as a joint initiative of the Government of Pakistan and commercial banks/ development finance institutions with the support of the International Finance Corporation and the World Bank to provide medium and long term funding to primary mortgage lenders in the housing sector by raising funds from the capital debt market at cheaper rates.
The primary mortgage lenders themselves are generally not in a position to raise funds at lower rates. Sources also said that the government has also established the Credit Guarantee Trust Fund for housing Finance registered to provide risk cover against financing to the housing sector. However, due to the repeal of the trust act 1882, CGTF has become dysfunctional.
Therefore, PMRC intends to register CGTF as a specialized trust defined under section 12 of Islamabad Capital Territory Trust Act 2020. Sources said that the law and justice division has communicated to the Finance division that CGTF is deemed to have been registered per section 12A (3) of the act, 2020.
Now, the trustee has to only complete the requirement for issuance of registration certificate to CGTF as a specialized trust. The registration certificate is to be granted by the director of the Directorate of Labour and industries of ICT on the provision of NOC from the regulator.
It is pertinent to note that the government had incorporated the PMRC with SECP in May 2015 and has been specified as a DFI under section 3A of the banking ordinance. the 28.86 percent shares of PMRC are held by the government of Pakistan, while resting of the 71.14 percent shareholding is held by the banking sector investors, including the National Bank of Pakistan, Summit Bank, Askari Bank, HBL, UBL, Bank Alfalah, and ABL, and HBFCL.