KARACHI: The Pakistan Mortgage Refinance Company (PMRC) has signed a 10-year risk Credit Guarantee Trust (CGT) agreement with six Islamic and conventional banks to promote low-cost housing loans.
The World Bank and the State Bank of Pakistan (SBP) extended their support for the establishment of CGT. The leading banks include Meezan Bank, Habib Bank, Bank Islami, Faysal Bank, JS Bank and Soneri Bank, with PMRC as the trustee.
Under this agreement, the PMRC will provide up to 40% risk coverage as a credit guarantee for banks’ housing loans, on a first loss basis. And, it will also facilitate 5 and 10 Marla houses under the private-sector construction projects.
While commenting on this, SBP Deputy Governor Mr. Jameel Ahmed said that the agreement incentivises the banks to extend low-cost housing financing.
In addition, the banks which achieve the target of lending will be rewarded, while those who fail to achieve the target will be fined, he further informed.
The SBP Deputy Governor strictly forbade authorities from charging extra money in the name of processing, as strict action will be taken against those practising this.
It is expected that other banks in the country will also sign similar agreements with PMRC in the coming days.
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