KARACHI: The State Bank of Pakistan has described as “factually incorrect and misleading” contents of a policy analysis paper formulated by an Islamabad-based research firm, Tabadlab, upon which Dawn’s report entitled “SBP package to benefit influential builders only: report” was based.

In a statement released in response to the news report published on Sept 11, SBP said its “guidelines issued on Sept 2, 2021 for housing finance in under-construction projects do not provide any ‘package’ or ‘incentive’”.

The SBP statement stated: “…The SBP guidelines in no way benefit ‘influential builders only’. Actually, these are designed to promote housing and construction finance for all categories of projects, including affordable and low-cost housing. The objective of these guidelines is to facilitate both potential home owners and builders who are currently unable to access bank finance for under-construction projects. Under these guidelines, financing will also be available for small projects of two to three apartments with area as small as 5 Marla or less.”

Referring to a key issue raised in the Tabadlab paper, the regulator said: “The objective of the SBP guidelines issued is not to micro manage the banks. On the contrary, these guidelines, prepared after detailed consultations with banks, provide an enabling framework that will help banks to venture into this new segment of financing. It is entirely up to the banks to decide which project(s) and builder(s) are credit worthy in accordance with their internal credit policies and due diligence.”

Published in Dawn, September 13th, 2021