As per revised Regulation HF-1(4) of Development of Financing Documents, in addition to existing requirements, banks/DFIs have been further advised to obtain the thumb impression(s) along with the borrower's signature(s) on financing and recourse documents. The banks/DFIs are also encouraged to provide terms and conditions in Urdu language for better understanding of the customers and read out the same to the customers before finalising the documentation process.
Under Regulation HF-1(08) relate to "Information Disclosure": For the purpose of calculating the Annualised Percentage Rate, the number of days in a year has been changed to 365 days from 360 days. According to "Regulation HF-1(11) of Facilities to Related Persons" banks have been asked that for the purpose of bringing clarity in the said regulation, amendment has been made that in case of resignation/separation/termination, staff housing finance should be monitored and serviced as commercial housing finance.
Regulation HF-2 (Types of Housing Finance) has been amended to the extent that the borrower can avail additional housing finance after the completion of two (02) years instead of three (03) years from the last date of disbursement. Moreover, the time to avail Balance Transfer Facility (BTF) in housing finance has also been reduced to eighteen (18) months from three (03) years.
Under the Regulation HF-3 of Debt Burden Ratio, in case of clubbing of income of the co-borrower, the consent of co-borrower should be obtained in writing.The restriction to determine the frequency of property revaluation has been lifted under the Regulation HF-7 (Property Assessment). Further, the housing finance up to Rs. 10 million should be subject to assessment of the property by at least one valuator listed on Pakistan Banks Association's (PBA) approved panel and the housing finance above Rs. 10 million should be subject to assessment of the property by at least two valuators listed on PBA approved panel.
However, the properties valuing up to Rs 3.0 million should not be subject to assessment by valuator. Banks/DFIs can use their internal resources to assess the properties having market value up to Rs 3.0 million. Banks/DFIs have been advised to ensure circulation of these regulations among all their offices/branches for meticulous compliance in letter and spirit. Non-compliance of PRs will lead to punitive action under the relevant provisions of Law, the central bank said. According to SBP, all other instructions on the subject shall remain unchanged and the transactions structured in a manner to circumvent these PRs will tantamount to violations of PRs and will be dealt with accordingly.
Copyright Business Recorder, 2017