KARACHI: The State Bank of Pakistan (SBP) amended prudential regulations for housing finance on Tuesday.

Housing finance surpassed Rs10 billion in the first half of the current fiscal year, which is indicative of significant growth.

The SBP encouraged banks and development finance institutions (DFIs) to provide customers with terms and conditions in Urdu and read out the same to them before finalising the documentation process.

“For the purpose of calculating the annualised percentage rate, the number of days in a year has been changed to 365 days from 360 days,” said the SBP.

In the case of resignation, separation or termination, staff housing finance should be monitored and serviced as commercial housing finance, said the SBP.

The regulations have been amended to the extent that the borrower can avail additional housing finance after the completion of two years instead of three from the last date of disbursement. Moreover, the time to avail balance transfer facility in housing finance has also been reduced to 18 months from three years.

“The restriction to determine the frequency of property revaluation has been lifted,” said the SBP circular.

Housing finance up to Rs10 million should be subject to the assessment of the property by at least one valuator listed on the Pakistan Banks Association (PBA)-approved panel.

Housing finance of more than Rs10m should be subject to the assessment of the property by at least two valuators listed on the PBA-approved panel.

However, properties valuing up to Rs3m should not be subject to the assessment by a valuator. Banks and DFIs can use their internal resources to assess the properties having a market value of up to Rs3m, said the SBP.

Published in Dawn, April 19th, 2017