Housing finance applications: SBP asks banks for system to monitor 30-day TAT

KARACHI: The State Bank of Pakistan (SBP) has asked banks to devise a system to monitor 30 days Turn Around Time (TAT) for decision on housing finance applications.

The SBP has been receiving a number of complaints especially regarding delayed processing, long turnaround time and no mechanism to track the financing application after submission. Accordingly, the SBP has advised banks to adopt some new measures to improve visibility of government markup subsidy scheme for housing finance.

In this regard, banks/DFIs have been directed to immediately start providing to the applicants a receipt with unique tracking number against each housing finance application. Meanwhile, banks/DFIs are advised to put in place within 30 days 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.

Under the new directives, banks will devise a system to monitor 30 days TAT for decision on applications received and record and convey reasons of rejection of housing finance application to the applicant in simple and clear form.

Banks have been asked to 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.

In addition, banks will also conduct rigorous trainings of branch officials to enhance their knowledge on G-MSS and improve their behavior towards customers and capacity building of call center officials to adequately address queries of customers.

According to SBP, it has also been observed that complaints lodged on State Bank complaint portal remain pending with banks for unduly long times. In this regard, the banks/DFIs are advised to adopt appropriate measures to resolve complaints in 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, SBP has advised banks/DFIs 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 by SBP.

Copyright Business Recorder, 2021