Circulars/Notifications / Infrastructure, Housing & SME Finance Department  

 IH&SMEFD Circular Letter No. 10 of 2022
July 25, 2022

The Presidents/Chief Executives
All Banks/DFIs/MFBs

Dear Sirs/Madams,

Government's Mark-up Subsidy Scheme for Housing Finance

  1. Please refer to IH&SMEFD Circular No. 09 dated June 30, 2022 on the captioned subject.

  2. In this regard, Government of Pakistan has decided to allow banks/DFIs/MFBs to disburse financing as per existing terms of MPMG in respect of cases approved and meeting any of the following conditions on or before June 30, 2022 subject to observance of condition at para 3:

    1. Approved cases (Purchase and/or Construction) pending for disbursement due to any legal formality. All pre-disbursement formalities have been done and bank has communicated the same (Being in advance stages, these customers have completed almost all pre-disbursement formalities, paid token money and incurred all incidental expenses (legal & processing fee, etc)). This refers to Benchmark 1 against which SBP has solicited data from banks on July 7, 2022.

    2. Approved cases where customers have entered into agreements, paid token money & obtained property documents from sellers or in case of construction loans, PTM / Fard for loan has already been issued. (These cases are just short of ‘approved cases pending for disbursement’ (Benchmark 1), as in such cases, a few internal procedures of banks may still be required to be completed but the borrowers have incurred all major costs/expenses based on approvals from banks). This refers to Benchmark 2 against which SBP has solicited data from banks on July 7, 2022.

    3. Peri-urban/NAPHDA project(s) cases where down payment has been received from customer. This refers to Benchmark 5 against which SBP has solicited data from banks on July 7, 2022.
  1. Further, the Government has decided that spread of banks and DFIs on the disbursements against cases mentioned at (a) and (b) above and falling under Tiers 2 and 3 of MPMG will be maximum of 250 bps over and above KIBOR (instead of maximum allowed spread of 400 bps currently allowed).

  2. The banks/DFIs/MFBs are advised to ensure that markup subsidy claims in respect of disbursements against above allowed customers are invariably accompanied by certificates of their respective internal audit departments verifying meticulous compliance with above conditions and other features of MPMG. State Bank of Pakistan will also conduct inspection of these cases during regular/special inspection of the bank/DFI/MFB.

  3. It is re-iterated that Government of Pakistan is in process of reviewing/revising features of the subject Scheme. Therefore, all other cases except those mentioned above at para 2 will be considered as and when revised features are announced by the Government.

  4. Please acknowledge the receipt.


Yours sincerely,

(Dr Mian Farooq Haq)


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