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Topic: NBP Saibaan Home Financing Subject: Credit Management Submitted By: Roll No SHER SHAH 58SYED ARSALAN SHAH66ALAMGIR KHAN78RABIA SALEEM 94HAYRAH ALI KHAN 93Submitted To: Sir IHTISHAM KHANDiscipline: BBA(hons) Semester: 7th Date:11/01/2017SAIBAN DETAILSProduct ItemsHome PurchaseHome ConstructionHome RenovationPurchase of Land + ConstructionBalance Transfer Facility (BTF)Home Purchase (House or Apartment) *Financing AmountUpto 35 MillionFinancing Period3 to 20 YearsDebt to Equity85:15 (Maximum)Home Construction *Financing AmountUpto 35 MillionFinancing Period3 to 20 YearsDebt to Equity85:15 (Maximum)Home Construction * - Product DetailFinancing AmountUpto 35 MillionFinancing Period3 to 20 YearsDebt to Equity85:15 (Maximum)Home Renovation *Financing AmountUpto 15 MillionFinancing Period3 to 15 YearsDebt to Equity80:20 (Maximum)Purchase of Land and for Construction thereon *Financing AmountUpto 35 MillionFinancing Period3 to 20 YearsDebt to Equity80:20 (Maximum)Re-Financing (Balance Transfer Facility (BTF)) *If you have a Home Finance Facility outstanding with another bank you can have it transferred to NBP through a hassle-free process.Mark Up Rates **Variable Rate Option:SBP Discount Rate +2% with12 months re-pricing (with Life Insurance)SBP Discount Rate +4% with12 months re-pricing (without Life Insurance)Processing FeeGovernment Employees: Rs. 500/- irrespective of financing amount.For Others:?Financing below Rs. 1 MillionRs. 1000???Financing between Rs. 1 to 4 MillionRs. 3000???Financing above Rs. 4 MillionRs. 6000??Other Charges *Income Estimation, Legal and valuation fee will be charged as per actual.Early Payments:?Prepayment of finance account, full or partial, within 5 years will be subject to early redemption charges @ 2% of the amount being prepaid. In case of beyond 5 years, no early redemption charges will be levied.?Prepayment Option AvailablePre-payment (Complete/Partial option available).PenaltiesIn case of late payment, Rs.5/-per day for late/overdue/defaulted installment Upto Rs. 10,000/-, Rs.10/- per day if amount overdue from Rs. 10,001/- Upto Rs. 20,000/- and Rs.15/- per day when overdue amount exceeds Rs. 20,000/- and so on.In case of Returned Cheques, penalty will be as per NBP’s approved tariff. In case of delay in construction:Delay of 1 to 89 days No PenaltyDelay of 90 to 119 days 1% of outstanding amountDelay of 120+ days Recall Finance. (with the prior approval of Head Office)Repayment Frequency and Mode etc.Equal Monthly Installment comprising principal and mark-up according to the amortization schedule based on pricing and tenure. The amortization schedule will be revised consequent upon review of the floating rate at the specified intervals.Eligibility *Must be Pakistani Resident (National)Aged between 21 and 65 years at the time of application/disbursement of loan.Salaried Person, Self-employed professionals and businessmen.Minimum income requirement Rs. 5000 for Govt. Employees, Rs. 10,000 for other salaried persons and Rs. 15,000 for self-employed and businessmen.Property located in NBP approved localities.Service duration: Two years for salaried class Three years for self-employed/business class.Required Documents:With Applications Form?**? Two attested passport size photographs? Two attested copies of your National Identity Card? Cheques for the processing charges? Property Documents:Any title document available (other documents may be required)AND1) FOR SALARIED PERSONS, WHOSE SALARIES ARE DISBURSED THROUGH NBP BRANCH? Employer Undertaking for remittance of salary at relevant NBP branch for credit to customer's account (to be provided at a later stage, format available at relevant branch)?? Employee ID Copy attested by NBP Branch (where applicable)? Attested copies of last three (3) months’ salary slips? Attested copies of last three (3) months bank statements2) FOR SALARIED PERSONS OF MNCs AND NBP APPROVED COMPANIES? Employer Undertaking duly attested by relevant NBP Branch, where applicable (to be provided at a later stage, format available at relevant branch)? Attested copies of last three (3) months Salary Slips?? Letter of Verification of Employment on Company Letterhead mentioning the date of joining?? Attested copies of last three (3) months bank statements3) FOR OTHER SALARIED PERSONS?? Letter of Verification of Employment on Company Letterhead mentioning the date of joining?? Attested copies of last three (3) months’ Salary Slips? Attested copies of last twelve (12) months bank statements? Attested copies of last three (3) months paid bills for electricity and telephone OR copies of last (12) twelve months’ credit card bills (whichever is available)4) FOR BUSINESS PERSONS? Bank Certificate stating applicant maintaining Business Account and the date of account opening?? Attested copy of latest Form 29 in case of Private or Public Limited Company? Attested copy of Partnership Deed (where applicable)5) FOR SELF-EMLPLOYED PERSONS? Attested copy of current professional association membership/practicing certificate. Adequate proof of professional engagement like bank certificates?? Attested copy of Partnership Deed (where applicable)**Any other document may be required on case to case asks by the bankHow to ApplyInstructions for completing the Application Form:Fill-in the form completelyPrint the "completely filled" formGet it signed by RefereesSign it yourselfAttach the?Required Documents And submit "In PERSON" to?NBP Saibaan Team?**SBP REGULATIONS FOR HOUSING FINANCEREGULATION R-15Banks / DFIs shall determine the housing finance limit, both in urban and rural areas, in accordance with their internal credit policy, credit worthiness and loan repayment capacity of the borrowers. At the same time, while determining the credit worthiness and repayment capacity of the prospective borrower, banks / DFIs shall ensure that the total monthly amortization payments of consumer loans, inclusive of housing loan, should not exceed 50% of the net disposable income of the prospective borrower.Banks / DFIs will not allow housing finance purely for the purchase of land / plots; rather, such financing would be extended for the purchase of land / plot and construction on it. Accordingly, the sanctioned loan limit, assessed on the basis of repayment capacity of the borrower, value of land / plot and cost of construction on it etc., should be disbursed in tranches, i.e. up to a maximum of 50% of the loan limit can be disbursed for the purchase of land/ plot, and the remaining amount be disbursed for construction there-upon. Further, the lending bank / DFI will take a realistic construction schedule from the borrower before allowing disbursement of the initial loan limit for the purchase of land / plot.Banks / DFIs may allow housing finance facility for construction of houses against the security of land / plot already owned by their customers. However, the lending bank / DFI will ensure that the loan amount is utilized strictly for the construction purpose and loan is disbursed in tranches as per construction schedule.Loans against the security of existing land / plot, or for the purchase of new piece of land / plot, for commercial and industrial purposes may be allowed. But such loans will be treated as Commercial Loans, which will be covered either under Prudential Regulations for Corporate / Commercial Banking or Prudential Regulations for SMEs Financing.Banks / DFIs may allow Housing Loans in the rural areas provided all relevant guidelines/regulations on the subject are complied with by them.REGULATION R-16The housing finance facility shall be provided at a maximum debt-equity ratio of 85:15.?REGULATION R-17Banks / DFIs are free to extend mortgage loans for housing, for a period not exceeding twenty years. Banks / DFIs should be mindful of adequate asset liability matching?REGULATION R-18The house financed by the bank / DFI shall be mortgaged in bank’s / DFI’s favour by way of equitable or registered mortgage.?REGULATION R-19Banks / DFIs shall either engage professional expertise or arrange sufficient training for their concerned officials to evaluate the property, assess the genuineness and integrity of the title documents, etc.It may, however, be noted that the requirement of full-scope and desk-top evaluation, as required under R-8 and R-11 of Prudential Regulations for Corporate / Commercial Banking and SMEs Financing respectively, will not be applicable on housing finance.?REGULATION R-20The bank’s / DFI’s management should put in place a mechanism to monitor conditions in the real estate market (or other product market) at least on quarterly basis to ensure that its policiesare aligned to current market conditions.?REGULATION R-21Banks / DFIs are encouraged to develop floating rate products for extending housing finance, thereby managing interest rate risk to avoid its adverse effects. Banks / DFIs are also encouraged to develop in-house system to stress test their housing portfolio against adverse movements in interest rates as also maturity mismatches.?REGULATION R-22The mortgage loans shall be classified and provided for in the following manner:CLASSIFICATIONDETERMINANTTREATMENT OFINCOMEPROVISIONS TOBE MADE*( 1 )( 2 )( 3 )( 4 )1. Substandard.Where markup / interest or principal isoverdue by 90 days ormore from the due date.Unrealized markup /interest to be kept inMemorandum Account and not to be credited toIncome Account except when realized in cash.Unrealized markup / interest already taken toincome account to be reversed and kept inMemorandumAccount.Provision of 25% of thedifference resulting from theoutstanding balance of principal less the amount of liquid assetsrealizable without recourse to a Court of Law and Forced SaleValue (FSV) of mortgaged properties to the extent of 50% ofsuch FSV.2. Doubtful.Where markup/ interest or principal is overdue by180 days or more fromthe due date.As above.Provision of 50% of thedifference resulting from theoutstanding balance ofprincipal less the amount ofliquid assets realizable without recourse to a Court of Law and Forced Sale Value (FSV) of mortgaged properties to the extent of 50% of such FSV.3. Loss.Where markup / interest or principal is overdue byone year or more from the due dateAs above.Provision of 100% of thedifference resulting from theoutstanding balance of principal less the amount of liquid assets realizable without recourse to a Court of Law and Forced Sale Value (FSV) of mortgagedproperties to the extent of 50% of such FSV for first and second year and 30% of FSV for third year from the date of classification. Benefit of FSV against NPLs shall not be available after 3 years from the date of classification of loan.* These specific provisions will be in addition to general reserve maintained under Regulation R4Branch Names and Contact Numbers of Saibaan TeamFrequently Asked Questions1. What is the Mark up rate for Mortgage Home Finance scheme??SBP Discount Rate + 2% (With Life Insurance)SBP Discount Rate + 4% (Without Life Insurance)2. What will be the loan tenor??NBP Saibaan?is available for the period ranging from 3 to 20 Years3. What are the minimum and the maximum loan amount that can be acquired??Maximum amount for all products except Home Improvement is.35 million and maximum amount for Home Improvement finance is 15 million.4. What is the Loan to Value ratio? Or how much financing can I get against my property?The permissible Loan-to-Value ratio is as follows:85:15 for loans below Rs.15 (M)80:20 for loans of Rs.15 (M) and above.The debt-equity ratio of 80:20 is applicable on those customers who don’t opt for life & disability insurance coverage.5. Who is eligible to apply?Please see the Eligibility Criteria.6. Who will assess the value of property?Different Qualified and experienced property valuation firms which are on approved panel of NBP conduct the property valuation.7. Will my spouse’s income also be considered??Yes you can also club your spouse’s income to qualify for higher amount of loan. In this case your spouse will be treated as a co-borrower.8. I live in Karachi and want to Purchase/ Renovate/Construct a house in Lahore. Can I avail your financing facility??Yes9. I am a property dealer. Can I avail loan from NBP for commercial purpose?No, we do not offer product for commercial property its purely for residential purpose.10. How much will I have to pay for: Loan Processing, Legal Opinion Property Valuation and Income Estimation?Please see the Schedule of Charges.11. Are these refundable, if my loan is declined??No, once the services are rendered the amount is Non-Refundable.12. I am a Businessman/Self Employed Professional, how will you assess my income?Income will be assessed through Income estimation by the Income Estimation Agency who conducts this estimation through documentation and business activity to estimate a minimum income of your business.13. I want to co-own a property with my cousin. Is it possible to avail?NBP Saibaan?for this purpose?No, only son and spouse are allowed to apply for a NBP Saibaan as a co-borrower.14. How to apply?You can apply for?NBP Saibaan?loan by visiting any of authorized branches. Our dedicated staff will help you completing your loan application form and other formalities. ................
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