Subsidy needed to save HBFC, Senate panel told

ISLAMABAD: The Senate Standing Committee on Finance met under chairmanship of Senator Saleem Mandviwalla here at the Parliament House in which the panel noted that House Building Finance Corporation (HBFC) was dying institution as it was getting credit line from the central bank at higher rate but providing loans for housing to borrowers at lower rates. 

Shahbir Zaidi, member of Board of HBFC, told the committee that this state institution was heading towards collapse and the government would have to provide some kind of subsidy to rescue it otherwise it would become another ailing entity.

He said that the HBFC made business plan for five years and the government would have to either grant them permission for tax free bond or export refinance type subsidy from the central bank or combination of both could be worked out to survive this dying institution.

The MD of HBFC said that they had so far provided Rs54 billion loans for housing provision since its inception but they prepared five year’s plan to jack up this amount up to Rs100 billion within few years’ period. This business plan, he said, was forwarded to finance ministry and SBP officials. The chairman of the committee directed the HBFC to share their business plan with them so that they could convince the government to provide them rescue package in a bid to avoid its complete collapse.

The committee took up the issue of Korean companies operating in Azad Jammu & Kashmir where the FBR official was asking for money from the companies for providing them their stuck up refunds. Rehamat Ullah Wazir, Member IR policy told the committee that the FBR had repatriated his officer who was working in the AJK on deputation basis. 

Federal Consolidated Fund: The committee was told that there was no law related to regulate federal consolidated fund so the committee directed them to come up with proposed law. Circular Debt of power sector: The chairman senator Saleem Mandviwalla constituted sub- committee headed by Mohsin Aziz on clearance of Rs480 billion of circular debt when PML-N-led government had assumed reins of power after winning 2013 general elections.