SBP directs banks to process the housing loans applications fast

KARACHI: The State Bank of Pakistan (SBP) has taken notice of delayed processing of housing loans by banks and issued directives in this regard to ensure speedy process of applications.
The central bank on Friday said that it is receiving a number of complaints especially regarding delayed processing, long turnaround time and no mechanism to track the financing application after submission.
In this regard, banks/DFIs are directed to immediately start providing to the applicants a receipt with a 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.
The central banks asked banks/DFIs to devise a system to monitor 30 days Turnaround Time (TAT) for decision on applications received, record and convey reasons of rejection of housing finance application to the applicant in simple and clear form, and 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.
The central banks asked banks/DFIs to conduct rigorous training of branch officials to enhance their knowledge on G-MSS and improve their behaviour towards customers. The SBP asked banks to conduct capacity building of call centre officials to adequately address queries of customers.
The SBP said that 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 a 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. 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.
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 percent 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, directed the central bank. – TLTP