The State Bank of Pakistan (SBP) Tuesday said that the Cash Reserve Requirement (CRR) for banks will not be applicable on targets of housing and construction finance.
In a notification, the central bank said, “To facilitate the banks, State Bank has decided that lower/additional Cash Reserve Requirement for banks that meet/do not meet quarterly targets will not be applicable on surplus/shortfall in targets of housing and construction finance for the quarter ending September 30, 2022, and onwards till further instructions on the matter”.
“Accordingly, banks will maintain lower/additional Cash Reserve Requirement in respect of surplus/shortfall in targets for the quarter ending June 30, 2022, in the next quarter as per the defined procedure. This means banks will maintain CRR (without lower/additional requirement) from the first reserve maintenance period started after October 21, 2022,’ it added.
It is pertinent to mention here that the central bank had announced an increase in the mandatory target of banks for housing finance and financing for construction of buildings from 5 percent to 7 percent of their domestic private sector credit.
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