SBP reforms regulations to boost housing, construction sector
Last updated on: 23 March,2021 11:39 am
SBP reforms regulations to boost housing, construction sector
KARACHI (Web Desk) - In line with Government of Pakistan’s initiative for the development of housing and construction sector, the State Bank of Pakistan (SBP) has been taking various regulatory steps to enhance banks/DFIs participation through their financing in the development of these sectors.
In order to boost activities in these sectors further, the SBP has now made changes to certain provisions of existing Prudential Regulations for Corporate & Commercial Banking to encourage enhanced participation and investment of banks/DFIs in the Real Estate Investment Trusts (REITs).
The changes in SBP regulations would enable banks/DFIs to make higher investments in REITs to the tune of 15% of their equity as against existing limit of 10% of equity.
This move will not only bring more capital towards REITs but would also enable banks/DFIs to diversify their investments.
In addition, SBP has also relaxed restriction, in existing regulations, on seeking financing against shares of listed group companies. It will enable investors in raising liquidity for further investment in new business opportunities and ventures leading to greater economic activity.
The change in regulation would also benefit the capital market by encouraging sponsors of companies to consider listing on the stock exchanges. This will promote documentation of the economy, transparency, and good corporate governance practices as well.