KARACHI: State Bank of Pakistan has initiated policy for financing of low-cost housing with the support and suggestions of stakeholders of this sector.

“In order to address this issue, State Bank in consultation with relevant stakeholders, has developed a policy for promotion of low-cost housing finance in Pakistan,” said the SBP on Wednesday.

The SBP believes that the housing sector in various economies serves as an engine of economic growth. “It has the potential to generate employment, increase productivity, raise standard of living and alleviate poverty.”

The formulation of policy for low-cost housing is an attempt to resolve issues faced by the mortgage industry, said the SBP adding that the policy has been formulated keeping in view international best practices and local market conditions.

“Focus of the policy is on regulatory incentives, risk mitigation mechanism for financial institutions and mechanism to address the issue of affordability for low-income borrowers,” said the SBP.

Pakistan, like other developing countries, has been facing shortage of housing units; and this basic human need is felt more profoundly at the bottom-of-the-pyramid comprising of the poor and financially under-served segments of the society.

“One of the key constraints hampering supply of housing units is the unavailability of financing,” said the SBP.

For soliciting public comments, the draft of Policy for promotion of low cost housing finance has been placed on the official website of the SBP.

Public comments received within a period of fifteen days will be considered before finalising the policy, it added.

Banks advised to activate OTC facility

The SBP on Wednesday advised all banks to activate the online collection of government taxes and duties collection of government taxes through 1-Link Online Tax Collection (OTC) facility.

All the banks and microfinance banking institutions (MFBIs) will activate the 1-Link OTC facility to facilitate their client particularly corporate clients and SMEs in payment of FBR taxes and duties,” said the SBP.

While 14 banks have already activated the OTC facility for collection of FBR taxes, the remaining banks will activate the OTC facility at the earliest but not later than September 30, 2018, said the SBP.

The banks may charge up to Rs50 per transaction for payment of FBR taxes through 1-Link OTC facility, said the SBP.

Published in Dawn, July 19th, 2018