PBA encourages banks to finance housing sector

Pakistan Banks Association (PBA), a business lobbying group, has given its support for housing and construction finance by banks, according to a statement released on Tuesday.

"Given its widespread benefits for the economic development of Pakistan, PBA supports the growth of Housing and Construction Finance and encourages its member banks to view it as a sound business proposition," the statement read. In its reasoning, the PBA said that it believed the sector was a critical contributor to the overall economy, because of its multiple linkages to other avenues of economic development.

However, the PBA noted finance for the housing and construction is very low in Pakistan, and contributes less than 1pc of the country's GDP; it is also one of the lowest in the region and comparable countries.

This is accurate: Pakistan's outstanding housing finance is only 0.5pc of GDP, which is also known as mortgage depth. Both Bangladesh and India have a higher mortgage depth, at 3pc and 10pc respectively.

The PBA welcomed steps taken by the government and the State Bank of Pakistan (SBP) to grow the housing and finance sector. These steps include low-interest rates, more effective foreclosure laws and construction being accorded an ' industry' status.

"While there are still a few unresolved issues which are being actively worked upon, PBA believes it is a good time for its member banks to see this as a growth area for future lending on a secured basis, with reasonable spreads." When asked to comment on what those "few unresolved issues" are, PBA declined to comment, saying that it regards internal sectoral matters still under discussion.

The Federal Board of Revenue (FBR) has raised more than Rs5.8 billion in the last one year from expatriates and travellers on import of mobile phones under baggage.

Since July 1, 2019, the government has withdrawn the facility of duty-free mobile handset under the baggage rules from abroad. The decision, according to the FBR, was taken following receipt of numerous complaints of the scheme's misuse.

Official data available with Dawn show that travellers brought as many as 1,389,707 mobile handsets between in FY20 under the baggage and registered it with Device Identification Registration and Blocking System (Dirbs). The government has introduced Dirbs to facilitate genuine users of mobile phones and discourage its illegal flow. At the same time, the new policy was also aimed to raise revenue, discourage smuggling and potential misuse.

Prior to this policy, the government had allowed one mobile handset to be imported in baggage duty-free by Pakistani expatriate/travellers to facilitate them. However, allowing more than that was against the policy of limiting imports, revenue shortfall and possible misuse. In the non-commercial individual category, the FBR has collected revenue of Rs7.04bn on import of popular brands from January 2019 until August 25, 2020.