The government on Monday gave the go-ahead to resume disbursements to already approved cases under Mera Pakistan Mera Ghar (MPMG) housing finance scheme.
Announcing the decision, the Finance Division said in a tweet that banks have also been asked to reduce their spread over KIBOR.
Finance Division has today conveyed its permission to resume disbursements to already approved cases under Mera Pakistan Mera Ghar Scheme( MPMG). Banks have also been asked to reduce their spread over KIBOR.#SBP #miftahismail
— Ministry of Finance, Government of Pakistan (@Financegovpk) July 25, 2022
In a circular, the State Bank of Pakistan (SBP) said that the government has decided to allow banks/DFIs/MFBs to disburse financing as per existing terms of MPMG.
The central bank said that the disbursement would be for approved cases meeting the following conditions on or before June 30, 2022:
a. Approved cases (Purchase and/or Construction) pending for disbursement due to any legal formality. All pre-disbursement formalities have been done and bank has communicated the same (Being in advance stages, these customers have completed almost all pre-disbursement formalities, paid token money and incurred all incidental expenses (legal & processing fee, etc)). This refers to Benchmark 1 against which SBP has solicited data from banks on July 7, 2022.
b. Approved cases where customers have entered into agreements, paid token money & obtained property documents from sellers or in case of construction loans, PTM/ Fard for loan has already been issued. (These cases are just short of ‘approved cases pending for disbursement’ (Benchmark 1), as in such cases, a few internal procedures of banks may still be required to be completed but the borrowers have incurred all major costs/expenses based on approvals from banks). This refers to Benchmark 2 against which SBP has solicited data from banks on July 7, 2022.
c. Peri–urban/NAPHDA project(s) cases where down payment has been received from customer. This refers to Benchmark 5 against which SBP has solicited data from banks on July 7, 2022.
The government has decided that spread of banks and DFIs on the disbursements against cases mentioned above and falling under Tiers 2 and 3 of MPMG will be maximum of 250 bps over and above KIBOR (instead of maximum allowed spread of 400 bps currently allowed).
The central bank advised banks/DFIs/MFBs to ensure that markup subsidy claims in respect of disbursements against above allowed customers are invariably accompanied by certificates of their respective internal audit departments verifying meticulous compliance with above conditions and other features of MPMG. State Bank of Pakistan will also conduct inspection of these cases during regular/special inspection of the bank/DFI/MFB.
The central bank further said that all other cases will be considered as and when revised features are announced by the government.
Finance Minister Miftah Ismail announced on Friday that the government will continue the low-cost housing finance scheme for all those whose loan applications have been approved and who have paid advances.
The minister further said that the government is still in the process of reshaping the scheme to make it cheaper and more widespread. This revised scheme will be rolled out soon.
The State Bank of Pakistan (SBP) had instructed banks to put further disbursements under the scheme on hold from July 01, 2022, till August 31, 2022.
