Circulars/Notifications / Infrastructure, Housing & SME Finance Department  

 IH&SMEFD Circular Letter No. 04 of 2021
April 30, 2021

The Presidents/Chief Executives
All Banks/DFIs/MFBs

Measures to be adopted to improve visibility of Government Markup Subsidy Scheme for Housing Finance

1.   Please refer to IH&SMEFD Circular No. 03 of 2021, whereby 'Government Markup Subsidy Scheme (G-MSS) for Housing Finance' was issued.

2.   SBP has been receiving a number of complaints especially regarding delayed processing, long turnaround time and no mechanism to track the financing application after submission.

3.  In this regard, banks/DFIs are advised to take the following measures:

  1. Immediately start providing to the applicants a receipt with unique tracking number against each housing finance application. Meanwhile, banks/DFIs are advised to put in place within 30 days from the date of this Circular an online e-tracking mechanism and a phone based help line to provide, on query of applicant, status and expected time required for decision on application.

  2. Devise a system to monitor 30 days Turn Around Time (TAT) for decision on applications received.

  3. Record and convey reasons of rejection of housing finance application to the applicant in simple and clear form.

  4. Equip the branch officials, through trainings and alignment of systems and procedures, to perform initial scrutiny and inform the customer about missing requirements/documents at the time of submission of application.

  5. Conduct rigorous trainings of branch officials to enhance their knowledge on G-MSS and improve their behavior towards customers.

  6. Conduct capacity building of call center officials to adequately address queries of customers.

4.  It has also been observed that complaints lodged on State Bank complaint portal remain pending with banks for unduly long times. The banks/ DFIs are advised to adopt appropriate measures to resolve complaints in timely manner. Moreover, policy for designation of focal person for State Bank complaint portal must be reviewed and it should be ensured that at least one focal person is present in each region to handle the complaints.

5.  Furthermore, potential borrowers under G-MSS have complained about exorbitant processing charges. Accordingly, banks/DFIs are advised to review and rationalize their processing fee for financing considering their actual costs and provide breakup of these charges to the applicants at the time of receipt of applications.

6.  In order to increase prospects of applicants to avail housing finance under G-MSS, banks/DFIs are advised to guide the applicants regarding the options of 100% clubbing of income of up to four co-applicants and enhancing their credit worthiness through third party guarantee as allowed vide IH&SMEFD Circular No. 01 of 2021.

7.  Please acknowledge the receipt


Yours sincerely,

(Dr. Mian Farooq Haq)


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