Green Earth Real Estate

SBP’s New Regulations on Financing Provisions for REITs

SBP’s New Regulations on Financing Provisions for REITs

State Bank extends financing limit for REITs

The State Bank of Pakistan (SBP) will extend financing limits to strengthen the housing and development sectors. In addition, Facilitating these new reforms will allow corporate and commercial banking to make higher investments in Real Estate Investment Trusts. 

Moreover, aligned with the government of Pakistan’s initiative for the new housing scheme and construction sector, the State Bank of Pakistan is taking necessary steps to increase banks/DFIs financing provisions towards the progress of this development. 

REIT units can be traded on stock exchanges and provide investors with numerous benefits. Hence, the SBP has modified previous regulations, against pursuing the finances of companies with listed REITs units. Now investors can raise their liquidity for future investment opportunities and ergo accelerate economic activity. 

The State Bank of Pakistan has enforced banks to increase mortgage loans to around 5 percent by December of 2021. While slashing the key interest rate from 645 basis points to 7 percent last year, boosting economic growth that went down 0.4 percent last fiscal year due to the COVID-19 pandemic. 

According to the regulation changes, by encouraging sponsors the capital market will benefit tremendously. 

“This will promote documentation of the economy, transparency, and good corporate governance practices as well,” said the SBP.

State Bank extends financing limit for REITs

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