The government departments in Punjab have now been granted the authority to invest public funds in various financial institutions, which include public banks, private commercial banks, Islamic banks, and microfinance banks.
Authorities have established strict eligibility criteria for commercial banks, approving a minimum long-term credit rating of “AA” for participation.
Only those institutions that are financially strong and highly rated will be eligible to manage government funds across Punjab.
The government funds will be allocated to banks that provide higher profit returns than the Bank of Punjab, thereby instigating a profit-driven competition among financial institutions vying for access to public deposits.
Additionally, the policy introduces a structured safeguard mechanism, if any competing bank proposes a higher return, the Bank of Punjab will be afforded a 14-day period to adjust and match its offer, thereby ensuring competitive equilibrium and safeguarding existing financial arrangements.
Officials have stated that the primary aim of this significant reform is to improve the efficiency of public fund management, maximise financial returns for the government, and ensure the optimal use and growth of state resources through market-driven strategies.
SBP makes getting house loans easier
Earlier, the State Bank of Pakistan introduced new steps to make it easier and faster for people to get financing under the government’s low-cost housing programme, “Wazir-e-Azam Apna Ghar”.
In a notice issued on Tuesday, the central bank said it wants banks to process applications more quickly and assess borrowers with greater flexibility.
The move is expected to help more families move closer to owning a home.
Read more: Home financing made easier as SBP shortens approval timelines
