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National Bank of Pakistan

Product Policy & Parameters

National Bank of Pakistan


Home Purchase Loan : Financial assistance being acquired under the NBP Mortgage Financing for the purchase of ready residential property House or Apartment. Max. Loan amount: Tenure : Debt to equity Rs. 35 Million 3 to 20 years 85:15

Home Construction Loan: Financial assistance being acquired under the NBP Mortgage Financing by mortgaging self owned residential land, which may be open or partially constructed upon, for construction purposes leading to self-occupancy Max. Loan amount: Tenure: Debt to equity Rs.35 Million 3 to 20 years 85:15

National Bank of Pakistan


Home Improvement Loan: Financial assistance being acquired under the NBP Mortgage Financing by mortgaging self owned & self occupied ready residential property House or Apartment, for renovation purposes Max. Loan amount: Rs. 15 million Tenure : Debt to equity 3 to 15 years 70:30

Balance Transfer Facility : Provide facility to those customers who have already availed housing finance from some other banks and they intend to switch their loans to NBP.

National Bank of Pakistan


PRICING
VARIABLE RATE (WITH INSU) VARIABLE RATE (WITHOUT INSU.) 12.50% 14.50%

ELIGIBILITY
All applicants must be Pakistani resident nationals ,CNIC holder, having clean CIB/Data Check report and maintaining salary/current A/c (if not, then A/c to be opened at NBP branch before finance disbursement).
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National Bank of Pakistan


TARGET MARKET
Type A: Salaried Class (Further divided into Two Categories) First Category A1: All permanent and confirmed employees of Federal, Provincial Govt., Semi-Govt., Autonomous, Semi-autonomous, Local and other bodies, whose salaries are/or shall be disbursed through NBP branches and whose employers are willing to give undertaking on NBPs prescribed format. These will also include permanent employees of NBP.
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National Bank of Pakistan


TARGET MARKET
Second Category A2: All other salaried class employees, including: Permanent Employees of Multinational Companies, scheduled banks and reputed companies that have been approved by NBP for Saibaan. Permanent employees of organizations other than the approved list. Contractual employees of the above categories including NBP employees. Employees defined in category A1 but fail to qualify because their employer is not willing to give the required undertaking or whose salary is or will not be disbursed through NBP branches or is requesting for mode of 6 repayment other than deduction from salary

National Bank of Pakistan


TARGET MARKET
Applicants employment/business/profession shall not be part of Negative professions. Here profession means that the applicants main source of income is from these professions. Approved organizations, corporate arrangements approved by H.O., and where employer undertaking of Govt. and related organizations (on NBP format for A-1 Category) is available are exempt from the negative professions list. Secondly, relevant RBC can also recommend a customer classified as employed in negative profession for the review and approval of the competent authority
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National Bank of Pakistan


TARGET MARKET
Type B Business Persons 1. (Minimum Income:Net Take Home2. >=Rs 15,000) 3. Sole Proprietor Partner Director of a reputed business/company

SelfEmployed Professional Doctor, Engineer, Designer (Minimum Income:Net Take Home Architect, Chartered Accountant >=Rs 15,000) Cost & Management Accountant
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National Bank of Pakistan


Co-Applicants: Only spouse, parents & adult male children can be co-applicant. The co-applicants income may be clubbed. In case where co-applicants income is being clubbed, then he / she should also fall in the prescribed age bracket for his / her category. The upper age for co-applicant to be 65 years, at the time of the maturity of the finance, where co-applicant is a non-earning member.

National Bank of Pakistan


INCOME:
For Type A1 Salaried class category (Govt. employees) minimum net take home income of Rs.5,000. (Employer will ensure mode of repayment of salary/installment transfer). For rest of the salaried class, minimum net take home income of Rs.10,000 will be required. For Type B (Business Persons and SelfEmployed) minimum net take home income required is Rs.15,000

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National Bank of Pakistan


Application Processing Fee* Category Fees Government employees Rs. 500/=*
For others, amount up to Rs. 1,000/=* Rs. 1 Million For others, amount Rs. 3,000/=* Between Rs. 1 Million to 4 Million For others, amount more Rs. 6,000/=* than Rs. 4 Million
*Above fees are market based and subject to change from time to time *Above fees are market based and subject to change from time to time 11

National Bank of Pakistan


External Agencies Fee*
Income Estimation Fee:** Loan AmountUpto Agency Name:M/s Anjum 3 Lac to 15 M Asim Shahid Rehman Intl Credit Information Ltd (ICIL) Fees* Rs. 2,500/=

Lawyer Fee:** Agency Name: M/s Mandviwalla & Zafar Ahmed & Qazi

First Stage(Document Fees* Review)Second Rs. 1,500/= Stage(Charge Registration, Rs. 3,500 etc Fees*Rs. 3,000/= Rs. 5,000/= Rs. 1,500/= (cost per visit)
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Valuators Fee:** Purchase/Improvement Agency Name:M/s Joseph Construction:(Initial fee)For any further visits Lobo (Pvt) Ltd

*Above fees are market based and subject to change from time to time. **External Agencies Fee is only refundable if not utilized at any stage of the process.

National Bank of Pakistan


LIST OF NEGATIVE PROFESSIONS
Lawyers Journalists (Publishers & Editors can be looked on case to case basis). Agriculturists unless where agriculture income is the main source of income Law enforcement personnel Commission based business e.g. stockbrokers, real estate agents, commodity brokers. Business involved in rental business. Business involved in giving away goods on loans or installments. Speculative business i.e. property buying & selling, stock purchase and selling. Government contractors / suppliers dealing with or owing money to GoP. Construction related business where there is no permanent office. Auto dealers / auto rentals. Transporters. People related to entertainment business. Jewelers (smaller ones only) 13 Politicians or politically connected people. people

National Bank of Pakistan Major Terms & Conditions Age


Minimum Salaried Maximum 22 yrs 56 yrs and 59 yrs and 6 mths 6 mths at the at the time of time of loan maturity. applying.

Businessperson / 21 yrs to 62 yrs at 65 yrs at the time Self-Employed the time of of loan Professional applying. maturity. 14

National Bank of Pakistan Major Terms & Conditions Maximum Loan Amount / Tenor
Home Purchase Rs. 35 m Home Home Construction Improvement Rs. 35m Rs. 15m

Maximum Loan Amount Loan Tenor

3 20 Years

3 20 Years

3 15 Years
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National Bank of Pakistan Major Terms & Conditions Debt Burden Ratio
Debt burden is defined as the sum total of external debt repayments divided by the net income: Debt Repayment Debt Burden = -------------------------------Net take home salary (or Net Income) Type A 1st Category: Monthly instalment of all the loans deductible from the salary credited to account at NBP not to exceed 50% of the net take home salary*. nd Type A 2nd Category: Monthly instalment shall not exceed 50% of the net take home salary*. Type B: Debts repayment (under the subject loan) not to exceed 50% of the net Income. 16

National Bank of Pakistan


Major Terms & Conditions Length of Employment
Type A: Minimum 2 years with the same employer for all applicants of salaried class If it is less than 2 years, then a past record of collective and continuous employment of three (3) years should be made available.

Type B: Length of occupation to be minimum three (3) year.

The customer should have service age remaining equal to the tenure of the loan and a cushion period of six months (that is, 6 months beyond maturity of the loan).
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National Bank of Pakistan


Major Terms & Conditions Property Eligibility
Property should be an already constructed House or Apartment. Should be having a separate title document and a leased one. Title document must be clear and chain of documents complete. Property can be co-owned by family members (spouse, parents, and adult male children). The property should be purely residential and self occupied. Purchase of property from parents, siblings and spouse is not allowed.
Special Conditions Related To Home Construction Finance: In order to be eligible for this product, the customer must be the owner of the land on which construction or/and extension is to take place.
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National Bank of Pakistan


Security
For security purposes, the property for the purchase / construction/ renovation of which the financing is being provided, will be mortgaged. Mortgage will be created jointly in case of co owners. Joint ownership with other than spouse/ parent / adult male children not allowed. 1 % token Registered of the finance amount and balance, as Equitable (reasonable) Mortgage will be created on the property. However, only Equitable Mortgage will be created on the properties financed at Karachi, Lahore, Islamabad & Rawalpindi. All the original property documents are to be reserved by the bank and charge to be created and registered with the Registrar of Documents/Assurance. The bank will also give three undated cheques in favour of NBP. Each check will amount to one finance instalment There should be no previous lien / claim on the property and Search Certificate to be obtained. No Certified True Copies of Title documents
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National Bank of Pakistan

Turnaround Time (TAT)


Solicitation {Documentation} Submission and Processing Processing and Region(EAMU) Credit Review & Approval at HO Disbursal Processing Not Applicable 2 days (Pre-approval) 10 days 7 days 3 days

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National Bank of Pakistan

LAWYER FEE
M/s Mandviwalla & Zafar / M/s Hashmat Law Associates / M/S Sardar Law Associates / Noor Muhammad Chandia First Stage (Document Review) Second Stage(Charge Registration, etc) Rs. 1,500/= Rs. 3,500/=

*Above fees are market based and subject to change from time to time

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National Bank of Pakistan

INCOME ESTIMATORS FEE


M/s Anjum Asim Shahid Rehman Fees* Rs. 2,500/= M/s International Credit Information Ltd. Fees* Rs. 2,500/=

Note:- If Finance amount is more than 15 M both income estimation companies will appraise the income.
*Above fees are market based and subject to change from time to time

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National Bank of Pakistan

VALUATORS FEE
M/s Surval / NPM / Projects Service Purchase/Improvement Construction (Initial fee) For any further visit Fees* Rs. 3,000/= Rs. 2,000/= Rs. 1,000/=

*Above fees are market based and subject to change from time to time

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National Bank of Pakistan

Insurance Companys Fee


EFU Insurance Company (Property Insurance) 0.055% of the Loan Amount

ALICO 0.525% of the outstanding loan amount.

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National Bank of Pakistan

EARLY REPAYMENT
The customer, at any point of time, may use the right to fully or partially pay the finance Customer will provide a written request for early repayment to the concerned Hub Branch that will be sent to the HO, subject to early repayment penalty in line with a)Partial Redemption (Balloon Payment) / Full Redemption within 5 years - 2% of the amount being prepaid b)Full/Partial Redemption beyond 5 years - 0%

A balloon payment case will be directed to the HO for amendments that may be required in the repayment schedules. The HO will approve a revised system generated repayment schedule and send to the concerned Retail Officer/Branch Manager at the Hub Branch, who will obtain signed customer acceptance 25

National Bank of Pakistan


E. POLICY DEVIATION: Hub Branches and Regions are required to forward, along with their recommendations, all those cases which have issues relating to policy deviation. If Hub Branch or Region does not favor recommendation, they still have to send these cases to Head Office along with the reasons for not recommending the case. Only Head Office has the authority to approve or disapprove any case with policy deviations.

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National Bank of Pakistan


Forwarding of Cases to Head Office In those cases where the legal, valuation and physical verification reports are satisfactory, the Hub branches/Regional EAMUs are required to send those cases immediately to Head Office even some other formalities such as NIC, Utility Bills, Credit Card Bills etc have not been fulfilled by the customer. However, these formalities and including others should be completed before the disbursement of the loan.

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National Bank of Pakistan

Concept of Hub & Referral Branches: All NBP branches throughout Pakistan will act as referral branches and can refer their NBP-Saibaan cases to Hub branches however, the property has to be located in the cities where NBP-Saibaan is being offered through Hub branches.

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National Bank of Pakistan


2. Employer Undertaking: As per IC # 11/2004 dated 20-01-2004 employer undertaking is must for A-1 category and those applicants of A-2 category who are employed with Multi-national and approved companies. Now this requirement of undertaking is being relaxed. That is, those applicants of A-1 category who are unable to provide their employer undertaking will be treated in A-2 category as mentioned above in the Target Market. However, salaries of A-1 category should be disbursed through NBP, if not, then they will be treated in A-2 as mentioned above in Target Market.
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National Bank of Pakistan


PROPERTY LOCATION: The property being financed has to be located in the city where the Hub Branch is located this must be strictly ensured. However, release is allowed only between following Regions: 1.Between Karachi South & Karachi West 2.Between Lahore Central & Lahore East For example, a salary account holder of Margalla Road Branch, Islamabad is purchasing a house in Rawalpindi, in this case, although the property is located in Rawalpindi, but the loan can be booked at any Hub Branch of Islamabad Region i.e. at the customers option.
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National Bank of Pakistan


9. Execution of Sales Deed: In case of Home Purchase the Sale Deed to be executed should not be less than the official property value of that area as prescribed by the government. Same is applicable for Home Construction cases where land / partial structures for construction is being purchased.

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National Bank of Pakistan


Customer Request Letter
To be submitted in case the Loan is declined and the applicant still insists to process the case.

A letter (Annexure B) has been developed to safeguard and indemnify NBP from any future claims by the applicant for refund of fees of the External Agency, if his/her application is declined due to the following and he/she still insist to forward the case to Head Office for special consideration:
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Customer Request Letter

National Bank of Pakistan

To be submitted in case the Loan is declined and the applicant still insists to process the case.

Data Check is negative. CIB (SBP) is negative. Medical Report is not satisfactory. Legal Opinion states that the property is not mortgagable or other reasons etc. Valuation is negative. Income Estimation states that the applicant is unable to come up with the required installments. >>>In such scenarios and circumstances Loan approval will be subject to Competent Authoritys 33 decision on the case.

National Bank of Pakistan


Purchase of Land for Construction
Financing for both, Purchase of land or partially constructed house as well as Construction on it.

Currently, NBP is offering financing for purchase, construction and renovation of homes. Many banks in Pakistan have also started financing for both purchase of land and construction on it. In order to stay competitive, it has been decided that NBP will now offer financing for this with maximum Debt/Equity ratio of 70:30.
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National Bank of Pakistan


Purchase of Land for Construction
Financing for both, Purchase of land or partially constructed house as well as Construction on it.

In this connection, 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, with 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.
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National Bank of Pakistan


Purchase of Land for Construction
Financing for both, Purchase of land or partially constructed house as well as Construction on it.

As noted above, 50% of the approved finance amount will be disbursed initially for the purchase of the land with the banks charge on the property to be created immediately. The remaining balance for construction on the same plot will be disbursed in 4 (four) tranches as currently being followed in Home Construction cases:
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National Bank of Pakistan


Purchase of Land for Construction
Financing for both, Purchase of land or partially constructed house as well as Construction on it. Stage Construction Status Finance Disbursement Schedule 1 2 3 4 Foundation Ground & Upper Floor Construction Electric, Plumbing & Wood Work Finishing 20% (of remaining 50%) 40% (of remaining 50%) 20% (of remaining 50%) 20% (of remaining 50%)
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National Bank of Pakistan


Purchase of Land for Construction
Financing for both, Purchase of land or partially constructed house as well as Construction on it.

Construction should start within 6 months after disbursement of first 50% of the approved finance amount. The total construction period should not exceed 15 months inclusive of the initial 6 months. During this period i.e. 15 months, customer will only be paying mark-up on the amount disbursed.

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National Bank of Pakistan


Purchase of Land for Construction
Financing for both, Purchase of land or partially constructed house as well as Construction on it.

Full installment payment complete of Principle payment will start from the 16th month or completion of construction, whichever is earlier. In order to assess the value of construction, which will form an integral part of loan assessment, customer will be required to submit a realistic Bills of Quantity (BOQ) on the Banks approved format, at the time of applying for the finance which will be duly approved by the Banks Valuator. Each subsequent tranche will be disbursed only after receiving satisfactory valuation report (Example).
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National Bank of Pakistan


Purchase of Land for Construction
Financing for both, Purchase of land or partially constructed house as well as Construction on it.

Additionally, the bank will also finance partially constructed structures with maximum Debt/Equity ratio of 70 : 30. Loan assessment in these cases will include value of land, cost of current partial structure and the further cost required to complete the property. BoQ submission is also required here to project remaining construction cost.

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National Bank of Pakistan


Initiating for Legal Opinion, Property Valuation and Income Estimation
Hub Branch to perform some of the functions of Regional EAMU Office.

It has been decided that apart from already assigned functions as per above mentioned circulars, Hub Branch will also do some of the functions of Regional EAMU Office which are outlined below:

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National Bank of Pakistan


Initiating for Legal Opinion, Property Valuation and Income Estimation
Hub Branch to perform some of the functions of Regional EAMU Office.

1. Generate request for Data Check and e-CIB to Head Office. 2. Initiation of Life & Disability Insurance request. 3. Generate letters to Regional EAMU Office for Physical & Telephonic Verifications. 4. Generate request for Legal Opinion from the authorized BLA for NBP-Saibaan. 5. Generate request for Property Valuation from the authorized valuator for NBP-Saibaan. 6. Generate request for Income Estimation from the authorized income estimator (where applicable).
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National Bank of Pakistan


Initiating for Legal Opinion, Property Valuation and Income Estimation
Hub Branch to perform some of the functions of Regional EAMU Office.

Copies of all above letters / correspondence are also to be provided to Regional EAMU office. The Regional EAMU office will enter the triggering dates of these tasks into the CAMS. Both the Hub Branch and the Regional EAMU office will follow-up with the agencies for the timely receipt of reports.
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National Bank of Pakistan


Initiating for Legal Opinion, Property Valuation and Income Estimation
Hub Branch to perform some of the functions of Regional EAMU Office.

The external agencies are to send the original reports to concerned Hub Branch with a copy to the EAMUHead, National Bank of Pakistan, Retail Banking Group, 11th Floor, Head Office, I.I. Chundrigar Road, Karachi. In this regard it is the responsibility of each RHQ and the Hub Branch to inform its external agencies about the change in the process as mentioned above. 44

National Bank of Pakistan


Initiating for Legal Opinion, Property Valuation and Income Estimation
Hub Branch to perform some of the functions of Regional EAMU Office.

Upon receipt of external agency reports, Hub Branch will forward the same along with the complete case file to its respective Regional EAMU office, where these reports will be entered into the CAMS and the case will be processed further. Regional EAMU office will also sign off on these reports along with the Hub Branch. The TAT of external agencies will need to be monitored by both the Hub Branch and the Regional EAMU office, ensuring that the time frame provided in the instruction 45 circulars is not hindered.

National Bank of Pakistan


Initiating for Legal Opinion, Property Valuation and Income Estimation
Hub Branch to perform some of the functions of Regional EAMU Office.

The function of Physical and Telephonic Verification will remain the responsibility of the Regional EAMU Office. Similarly, the Data Check and CIB will still be the responsibility of Head Office; however, the request will be generated by the concerned HUB Branch. In this regard, the Hub Branch will send a request to its Regional EAMU office for initiating these verifications. Hub Branch will generate these requests on the same day or before it initiates the 46 case for external agencies.

National Bank of Pakistan


Charge on the Property
1% Registered Mortgage of the Finance amount and remaining balance as Equitable Mortgage.

With immediate effect it has been decided that in Karachi, Lahore, Islamabad & Rawalpindi for security purposes, property is to be 1% token registered (of finance amount) and balance as equitable mortgage. However, RHQs at these cities will have concern to have the property on 100% equitable mortgage subject to approval by Head Office.
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National Bank of Pakistan


Removal of Per Party Limit: Recently, SBP has removed the maximum per party limit of Rs. 10 million in respect of housing finance. Therefore, it is decided that the maximum per party limit of Rs. 10 million under NBP Saibaan to be removed with immediate effect and be capped at Rs. 35.00 million EXCEPT for Home Improvement which is to be capped at 15 M. However, all home financing facilities above Rs. 10 M will be subject to a maximum of debt to equity ratio of 80 : 20
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National Bank of Pakistan


Government Employees Minimum Net Take Home Salary to be Rs. 5,000/=: In order to facilitate all government employees, it has been decided that minimum net take home salary requirement be made Rs. 5,000/irrespective of whether they are willing to provide required employer undertaking or not. However, their salary A/c has to be maintained with NBP and their salary to be directly credited to their salary A/c.
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National Bank of Pakistan


Making Life & Disability Insurance Optional:
It is decided that life & disability insurance be made an optional feature instead of the current status of being compulsory. However, in cases where the applicant does not opt for life & disability insurance: The debt to equity ratio to be 80:20 instead of 85:15 Markup rate to be raised by 2%.

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National Bank of Pakistan


2 Income Estimation for facilities above 15.00M
All financing facilities of Rs. 15 Million and above will be required to have two income estimation reports from two different agencies and the cost will be borne by the customer.

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National Bank of Pakistan

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National Bank of Pakistan


Background: As per current policy at the time of disbursement (handing of payment order) Bank/BLA has to take the original property documents in its custody. This works fine in a normal case of housing finance, however, the said practice does not hold true in cases of Balance Transfer Facility (BTF).

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National Bank of Pakistan


Background: The reason for this is that in BTF cases the original property documents are already in the possession of a Bank for which BTF has been approved and the concerned Bank takes some time (due to internal process) in releasing/delivery of the original documents after receiving the pay order on behalf of the borrower
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National Bank of Pakistan


Procedure: To streamline the process of BTF, the following four steps are to be followed : 1) 2) 3) 4) Documents requirements from the customers. Inspection of Original title documents. Letter from the institutions. Handing over the Payorder to the concerned institution.
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National Bank of Pakistan


1. Documents requirements from the customers While processing the BTF cases NBP must require following from the customer/borrower: Duly attested copy(ies) of title document(s) from the bank that is holding such documents. A copy of acknowledgement of receiving the title documents from the customer that he/she would have obtained from the bank while depositing title documents with that bank. A copy of Letter to Releasing Bank
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National Bank of Pakistan


2) Inspection of Original title documents. The risk for not inspecting the original title documents previous to disbursement must be moderate by having the genuineness of the photocopies of the title documents that the customer would have submitted to NBP, independently confirmed from the relevant offices. Regions will be responsible for getting the genuineness of the documents verified from the BLA through relevant offices. 57

National Bank of Pakistan


Letter Format: Kindly note that acceptance of the said pay order by you will be treated by us as confirmation that photocopy(ies) of title documents(s) that were provided to us by our customer (and copies of which are attached with this letter) is/are true copy(ies) of the original document(s) that is/are in your possession.

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National Bank of Pakistan


Letter Format: If NOT, you must return the pay order immediately inform us to enable us to protect our bank from any potential fraud. Yours truly, ______________ Authorized Signer
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National Bank of Pakistan


NOTE: Additionally, it may also be ensured that BTF cases of only reputable commercial banks will be accepted.

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National Bank of Pakistan


COMPETITIVE ADVANTAGES
LOWEST MARKUP RATE. LOWEST PROCESSING FEE. HIGHEST DEBT EQUITY RATIO. LOWEST MINIMUM REQUIREMENT. HIGHEST NUMBER OF POSITIVE AREAS
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