The Presidents/Chief Executives
All Banks

Dear Sir(s)/Madam(s),

Mandatory Targets for Housing and Construction Finance

    Please refer to IH&SMEFD Circular No. 02 dated January 21, 2022. It may be recalled that, based on this Circular, State Bank has, in consultation with banks, allocated and conveyed quarterly targets to banks till December 31, 2022 through one-on-one correspondences. The banks are incentivized/penalized on surplus /shortfall from these quarterly targets in line with DMMD Circular Letter No. 03 dated October 07, 2020 and DMMD Circular Letter No. 02 dated January 21, 2022.

2. In order to facilitate the banks, the period to achieve these targets for housing and construction has been extended from December 31, 2022 till June 30, 2023. However, mechanism of incentive/penalty will remain applicable on surplus/shortfall in targets for the quarter ending June 30, 2022.

3. Further, SBP will, in consultation with banks, reallocate absolute amounts of already communicated quarterly targets for quarters ending September 30, 2022 and December 31, 2022 over the next four quarters starting from quarters ending September 30, 2022 till June 30, 2023. Although achievement of these quarterly targets will not be mandatory, State Bank expects the banks to continue making all-out efforts to achieve their housing and construction finance targets while duly considering their internal credit risk policy and risk profile of their borrowers.

4. All other instructions on the subject shall remain unchanged.