Consumer Financing in Pakistan

FINANCIAL INSTITUTIONS
Term Report
Consumer Financing
In Pakistan
Submitted To: Sharique Ayubi

What is Consumer Financing?...........................4
What are the benefits of getting finance?.........4
Types of financing options for Consumers........4
TABLE Credit Card Financing.......................................5
Credit History....................................................5
OF Mortgages Calculator........................................7
Advantages of buying home.............................7
Disadvantages of buying a home......................8

CONTENTS Personal Loan financing..................................10
Consumer finance: what chances of success. .12
Consumer Financing in Pakistan:....................17
Bank Alfalah Limited.......................................18
Bank Al-Habib Limited.....................................31
Muslim Commercial Bank Limited (MCB).........34
United Bank Limited........................................45
Habib Metropolitan Bank Limited....................52
Summary........................................................54
Consumer Financing in Pakistan Financial Institutions
Banks behaving like

cartel, fleecing
depositors: report......55
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WHAT IS CONSUMER FINANCING?
Consumer financing provides individuals the necessary financing for personal

purchases ranging from buying a car, shopping purchases to buying a house.
Most people don’t normally get access of capital through equity markets so
they would normally get access to debt finance through the established
financial institutions including banks, credit union, insurance companies etc.
This debt is usually in the form of a credit card or loan.
WHAT ARE THE BENEFITS OF GETTING FINANCE?
A loan gives you the money you need to pay for something big like a house, a
car, college tuition, or major home repairs when you don't have the cash to
cover the purchase. While small purchases can be paid for in advance with a
credit card. Most people could not afford to do these things without finance.
TYPES OF FINANCING OPTIONS FOR CONSUMERS
 Home loans
 Student loans
 Car loans
 Personal Loans
 Credit Card
 Debt Consolidation
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CREDIT CARD FINANCING

Provides Information on Credit Card financing and their benefits and pitfalls.
WHAT IS A CREDIT CARD
A credit card is a plastic bank card with a magnified strip. Like all bankcards it
enables consumers to make purchases and withdraw money up to a limit set
by the providing financial institution. Unlike debit bankcards this provides the
convenience for the consumer to purchase products immediately and pay for
the cost of the goods later.
CREDIT CARD REPAYMENTS
Most credit cards can involve no initial interest, but the full price of the
purchase or withdrawal must be paid for within the specified period which
could be from 30 to 90 days depending on your institution. If it is not paid by
the specified date, it may require interest payments. In conjunction with this
purchase repayments there is usually an annual fee charged on most credit
card accounts for their convenience.
WHO SUPPLIES CREDIT CARDS
Financial institutions provide their own specific credit cards usually in

partnership with major providers such as VISA and MasterCard as they are
globally recognized worldwide.
CREDIT HISTORY
This area provides information about a consumer's credit history, why it is
important and the issues faced if you have had a bad one.
THE IMPORTANCE OF A GOOD CREDIT HISTORY
When consumers seek financing for their investments, mortgages and

personal expenditures all credit approvals will be adjudged on a consumer's
credit history.
All applicable financial institutions that by law are allowed to lend such as
banks use a persons credit history (which is a score compiled on a persons
previous credit) in the process for approving there loans. These financial
institutions evaluate the potential risk by providing the recipient a loan and
the probability that the they would be pay it back including mitigating the
potential loss due to the inability of loan recipients to pay back the loan.
In particular your credit history is a reflection of information that creditors

have reported to credit bureaus, e.g. if you had bought a car or TV from
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financing options. Credit bureaus can legally report poor payment information
for about 7 years and for bankruptcies for about 10 years.
CONSEQUENCES OF A BAD CREDIT HISTORY
A bad credit history can pose problems when trying to attain financing from
institutions that have strict credit history requirements. With a bad history
you may still be able to attain financing but at a higher interest rate which
many institutions may offer to offset the potential risk of the bad history.
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MORTGAGES CALCULATOR
Provides information about Mortgages Financing including renting vs. buying,
variable vs. fixed and home loan benefits.
WHAT IS A HOME LOAN
A home loan (also called a mortgage) is a loan agreement that enables a

person to borrow money to buy a house or other property. The property is
used as security for the loan. The lender may take possession of the property
if the loan cannot be repaid. A person may obtain a mortgage any financial
institution that offers. A standard loan includes a Principal (unpaid loan
amount) and interest over a 25 year period. Depending on the loan
agreement, the home loan may come at either a variable or fix interest
amount.
As you pay off the loan initially a large portion of your loan repayment will go
towards the interest. However as the borrower pays off the loan, more of the
each monthly payment goes to the principal and less towards the interest
eventually paying off the loan.
VARIABLE VS FIXED INTEREST RATE
Variable rate depends on the official interest rate set by the central bank of
each country. This rate in conjunction with the banks spread forms the
interest rate. This variable rate can fluctuate depending on central bank
strategy, by cutting interest rates, there will be a reduction in repayments
and increasing interest rates means an increase in repayments to your
lender.
Fixed rate is a fixed interest rate set by the agreement with your financial
institution; this rate is set for the life of the loan period agreed upon with your
institution. This means you will have a set repayment to pay consistently
through the life of your loan.
ADVANTAGES OF BUYING HOME
Buying a house has its positive and negative aspects and so before deciding
whether to go ahead and purchase that home, look at the pros and cons in
conjunction with your situation and decision will be appropriate for you.
ADVANTAGES OF BUYING
 Build Equity. As you are making your mortgage payment, you're building
equity. Equity is the portion of the property that you actually own through
your payments, versus the portion that you still owe the mortgage lender.
The longer you stay in your home and the more mortgage payment you
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make, the more equity you'll have. This may assist you in using your equity in
purchasing another property or another useful investment.
 Appreciation of housing value. Over time housing prices gradually increase

although this may fluctuate, in general housing prices consistently over a long
period go up.
 Stability and Freedom. By owning your own home you can decorate and
renovate your home whichever way you like. Also staying in a common
location for a number of years will provide a stable environment for children
growing up.
 Financial Credibility. Owning your own home helps you establish financial
credibility with banking institutions which can help if you intend to finance in
the future.
 Independence. Provides you with independence and privacy from landlords

with inspections of your home. Landlord limitations on pets, renovations etc
will not longer apply.
 Pride. A house is only a building while a home is when people living within
its walls. Owning your own home provides owners with the sense of pride and
satisfaction knowing that they created, renovated and enjoyed times within
their home.
DISADVANTAGES OF BUYING A HOME
Buying a house has its positive and negative aspects and it is not for
everyone. Depending on your life style and stage in your life it may or may
not be the right time to buy a home.
DISADVANTAGES IN BUYING
Below are some disadvantages of buying a home.
 Larger costs then renting. Not only now will you be paying a monthly
mortgage but include the added costs of maintenance and repairs.
 Bad Area. Depending on the area you moved to could have implications on
your long term ambitions; this can require living through a period with bad
neighbors, unhelpful council and many other problems that can plague an
area. After you've bought a home, you may not have as much flexibility in
choosing a new location or job.
 Inflexible to job opportunities. After you have bought your own home there
will not be as much flexibility in choosing a new job in another location.
 Home prices fluctuations. Depending on when you bought your property

during a boom or bust period could influence the appreciation or depreciation
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of your properties value. There's no guarantee that your home will increase in
value, especially if it was bought overvalued.
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PERSONAL LOAN FINANCING
WHAT IS A PERSONAL SECURED LOAN?
A personal loan is a loan to an individual that can be used for almost any
purchase, including purchasing cars, schoolbooks, and holidays or paying off
existing debts. The lending criteria can be structured to meet different
individual’s requirements:
 With secured and unsecured loans

 Length of loan may vary with individual requirements e.g. 1 to 5 years
 Variable vs. fixed interest rates
HOW MUCH CAN I BORROW FOR A PERSONAL LOAN?
Usually the key aspects in guiding the lending institution of the amount to
borrow can include:
 How much income do you earn per year – Providing pay slips
 How long you have been at this employment
 Good credit rating
If property is secured against the loan, is it mortgaged and if so how much?
HIGH RISK PERSONAL LOANS VS. LOW RISK LOANS
Personal loans are considered more risky than other types of loans. Borrowing
to purchase a home is considered a good business decision as well as
borrowing to invest in a newfound business. These types of borrowing tend to
convince lenders that they are of lesser risk. However personal loans can be
used for virtually any purpose and this lack of certainty in investment
decision provides lenders with higher risk of default.
WHAT IS THE DIFFERENCE BETWEEN SECURED AND UNSECURED

LOAN
A financial institution may provide a secured personal loan with the offer
lower interest rates if security is used against your house or some other
security. In case of default the lender is able to seize/claim the security.
However in most cases financial institution provide unsecured personal loans.

These are higher risk then secured personal loans because the lender is not
able to claim on a security such as your home in case of default. Note.
Depending on circumstances they may still be able to claim the amount due
in case of default.
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PERSONAL LOAN INTEREST REPAYMENTS VS. TIME.
The actual repayment of a personal loan depends upon the repayment

method chosen by the borrower. Monthly repayments would incur higher
repayments of interest then repayments of weekly or fortnightly.
The length of the loan affects how much interest is actually paid. The longer
the period of the loan, the more interest you would have to pay.
Disclaimer, the use of this website provides no actual advice is to be taken,

refer to your financial institution for quality advice.
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CONSUMER FINANCE: WHAT CHANCES OF SUCCESS
In a generic sense, institutional arrangements that provide consumers with

financing support to enhance their consumption and, as a result thereof,
improve their standards of living, should fall within the broad definition of
consumer finance.
These could range from credit cards, to finance and operating leases, to
housing finance. But the semantics of financial markets generally tend to
exclude housing finance from this range treating it as a distinct financing
product essentially because of its long-term nature.
Admittedly, consumer finance spurs consumption and demand that is

necessary for the industry to expand its productive capacity or make fuller
use of its existing excess capacity, and succeed in cutting prices at the retail
level. It also offers the prospects of increasing employment and, possibly,
fresh investment in industrial sectors, especially those producing consumer
durables.
However, the key to sustaining the consumption-demand equation without

pushing inflation to unsustainable levels is the maintenance of the critical
balance between savings, investment and borrower’s debt-servicing ability.
There is considerable truth in the observation that lowering of interest rates

by central banks in the mid-1990s, ostensibly to spur demand and economic
activity, resulted in acquisition of excessive amounts of “easy” bank credit by
businesses and creation of over-capacity there from.
Similarly, households too acquired credit (far in excess of their capacity to

save and repay) for investing in houses, consumer durables and company
shares on visibly inflated prices. The credit boom and the demand created
there from, led to meteoric rises in prices and deluded industry into over-
investing in capacity building. Eventually, unsustainable burden of debt-
servicing forced businesses to crash, and households ended up with negative
equities.
Maintaining the critical balance between savings, investment and borrower’s

debt-servicing ability is possible if input prices remain stable affording
businesses to sustain their profitability, and interest rates too remain stable
to ensure that, in the medium term, debt-servicing burden remains affordable
for both consumers and manufacturers.
Unless the system can ensure the maintenance of this delicate balance,
economic instability will remain a strong possibility. Countries that tried to
achieve an over-kill in spurring domestic demand sometimes overlooked the
importance of maintaining this critical balance.
We too are trying to achieve the same objective but regulators must ensure
that we don't fall in that dangerous trap. Pakistan's economy, already
rendered fragile by industrial sector loan losses, simply cannot live through
another major upheaval caused by pervasive delinquency of consumer loans.
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For the past 55 years, commercial banks in Pakistan had completely ignored
consumer financing as an activity. There was scant realization of the fact that
the hallmark of healthy economies is not unrealistically high dependence on
exports but on domestic demand, and development of indigenous resource
and industrial bases that support domestic consumption.
Until the early 1990s, even credit cards were offered to a select band of
customers who needed them not by way of financial support but as a
convenience for paying their bills while traveling abroad, realizing little that in
developed economies this mode of financing supported consumption to
sustain steady growth in domestic demand which, in turn, prompted
investment and industrialization.
Even now, the sudden urge for promoting consumer finance has less to do
with accepting this reality; it was spurred largely by a depressed investment
climate in which reduced borrowing by industrial and commercial sectors
coincided with excess liquidity in banks, thanks to 9/11. Lumbered with
liquidity that is nearing unmanageable proportions, banks are now
aggressively promoting consumer financing.
The big attraction in extending financing facilities to the passive consumer

segment is the prospect of earning high interest rate spreads because
consumers are soft targets as far as haggling over interest rates chargeable
to them are concerned. They are much more likely to borrow at unrealistically
high rates - a convenience that is no longer available on lending to industrial
and commercial borrowers who insist on the finest possible loan rates.
But in pricing consumer loans unrealistically high, banks would be making a

serious mistake because "they cannot charge a high enough loan rate that
could compensate for the loss arising out of an irrecoverable loan." More
importantly, if consumer finance has to pick-up as a truly helpful mechanism
for spurring domestic demand, it must be ensured that it remains within the
consumers' capacity to repay their loans on time, and they feel confident
about borrowing again and again.
As it is ordinary consumers capacity to borrow and repay loans out of their

savings has been rendered precarious by decade’s long cycle of inept
economic policies that have made the poor even poorer.
Low rise in per capita incomes (whose impact was compounded by falling
their purchasing power due to rapid depreciation of the Rupee) caused
savings to fall and poverty to rise. This combination steadily depressed
demand even for the less expensive consumer durables.
The sustained trend of depressed demand prevented the development of a

sizable industrial base and marginalized the opportunities for investment and
employment. In the last two years, steady reductions in returns on savings
have further diminished consumer’s capacity to repay loans.
It would therefore be unwise to assume that ordinary consumers will have the
capacity to re-pay loans out of their savings. Even in good times, ordinary
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Pakistanis were unable to save more than 14 per cent of their disposable
incomes. In the current scenario, capacity of the lower middle class - current
target of the banks - to save has only worsened.
Banks are belatedly trying to redress this enormous macroeconomic

structural imbalance but given the historic pattern of economic
developments, they will be handicapped in their efforts to promote consumer
finance. Signs are that lower interest rates have enhanced the capacity of the
middle and upper middle class to borrow and service consumer loans, but not
the lower middle class.
The demand-pull is pushing prices of consumer durables to unrealistic levels.

Take, for example, automobiles. Strengthening of the Rupee and substantially
lower interest rates should have lowered their prices.
The expectation wasn't met because rise in demand (purposely prevented

from being met with assemblers trying to avoid production in two shifts
instead of one shift) created a distortion that allowed assemblers not only to
keep prices high but also to create a roaring black market in this sector.
With banks now offering liberal consumer finance facilities for acquiring home
appliances, their prices too are on the rise although excess manufacturing
capacity in this sector may encourage the less greedy manufacturers to
concentrate more on stretching demand by refraining from pushing up prices.
Many observers argue that this distortion is a temporary phase, which will
soon become history as production capacities increase to fill the large supply
gap. May be so, but going by the example set by the automobile industry (in
which, so far, only one assembler has announced a "plan" to double its
output) this lag may not be as temporary as optimistic observers make it out
to be.
Banks providing cheap credit to business and industry at the expense of their
depositors can exercise a powerful influence on the manufacturing sector to
push the case for compensating savers through lower prices. Unfortunately,
however, lack of social responsibility in the corporate sector is too pervasive
to bring home this realization to the market players.
Aside from the macroeconomic distortions that suppress consumer demand,

there are other delicate issues that require focused attention of commercial
banks intending to launch a major thrust in consumer finance. The first is the
lack of institutional arrangements and practices that hamper the assessment
of consumer’s re-payment risk.
Ideally, risk assessment of employed individuals should not pose as much of a

problem as in the case of self-employed individuals because employers could
help in providing a basis for establishing their employee’s repayment
capacity. That, unfortunately, is not yet the case. Employers appear averse to
taking even the feeblest responsibility on account of their employees.
Many employers either don't certify, or certify very inadequately, the financial
status of their employees intending to avail a consumer finance facility from a
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bank. Unless provisions are made in relevant labor laws, employers will not
provide even this information about their employees, which they should
morally feel bound to provide.
Fewer among them are prepared to confirm to the financing institution that
they have placed on their records the fact that their employee has availed a
financing facility. Fewer still are prepared to accept the responsibility of
informing the financing institution in the event the finance-availing employee
leaves the employer, or is asked by the employer to leave.
In the case of the self-employed, the problems are complicated further

because many potential consumers do not keep credible records of the
stream of earnings from their vocations or businesses to permit financing
banks a reliable assessment of their future re-payment capacity. Many
consumers don't have even utility service connections in their names. Given
these handicaps, credibly verifying consumers' repayment sources will remain
a stumbling block.
Unless insurance companies lend a helping hand in this effort by providing

loan re-payment guarantees to the lending banks, the prospects of expanding
the consumer finance market remain dim. Bankers will have to rely largely on
their own credit judgment, which may not always be correct. Given Pakistani
banker’s track record in lending, such a possibility will always be there.
A factor that will further complicate extending consumer finance facilities

along sound lines are the continuing inadequacies of our legal system that
make it cumbersome for borrowers to collateralize their existing
unencumbered assets for the satisfaction of the lending bankers. Another
thorny issue is the re-possession of financed assets.
While re-possessing vehicles doesn’t pose too serious a problem, re-

possessing assets such as air-conditioners, refrigerators, and televisions sets,
and similar other appliances from households will not be easy. It could be
both painful and embarrassing for the lending institutions. Even if these items
could be repossessed, re-selling them to recover book values of outstanding
consumer liabilities holds out a challenging prospect.
Resorting to short-cuts in risk assessment may therefore lumber banks with

thousands of small delinquent loans. In most cases, it may eventually be
cheaper to write them off rather than go for re-possession and sale of used
assets, or initiate court action to recover loans from defaulting consumers.
Consumer finance is a risky ball game. The infamous yellow cabs scheme was
the only big experiment in consumer finance, which was undoubtedly a bad
experience for most banks that took part in it. Admittedly, political twists
played a big role in the failure of the scheme but operational inadequacies of
banks played a bigger role in this monumental failure.
A major factor in that failure was the operational deficiencies in banks,

particularly in assessing an individual’s future repayment capacity keeping in
view his or her changing circumstances. Foreseeing impending changes in the
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circumstances of individuals is not the same as sensing the impact of

changing business cycles on major borrowers placed in various economic
sectors.
Little is available in terms of authentic statistics on this huge customer

category. Pakistan Integrated Household Survey (PINS) is a new report, and
could prove very helpful to banks in devising consumer finance strategies but
its timely release cannot be assured because it may report changes in
politically sensitive indicators.
Given the absence of credible sources and bases for assessing risk, dealing
with thousands of small borrowers makes consumer finance a manpower
intensive business. Retail banks with large branch networks have the
potential for succeeding in this business but it will require making alterations
in bank’s infrastructure and a change in the focus on investigative effort for
risk assessment.
The organization must be pro-active and sufficient in terms of manpower and

management information systems to ensure a reaction speed that is
commensurate with the size of the customer base. In this regard it will be
crucially important to ensure that administrative resources are matched with
the size of customer base on a continuing basis.
Until recently, oblivious to the emerging possibility of creating a large

consumer finance market, banks were closing down branches and lying-off
employees. Admittedly, there was a need for pruning the banks of deadwood
but voluntary retirement schemes led to separation of many experienced
hands that could have been re-deployed in consumer finance units because
they knew the essentials of risk assessment. Banks will now have to inject
fresh (and inexperienced) blood in their organizations to support their
consumer finance operations.
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CONSUMER FINANCING IN PAKISTAN:

In Pakistan, more or less all the major banks are providing consumer
financing. The industry is highly competitive, fairly efficient and has a high
potential of future development. Generally banks provide the same kind of
options in terms of consumer financing. In this report, the following 5 banks
and their consumer financing has been explained.
 Bank Alfalah Limited
 Bank Al-Habib Limited
 Muslim Commercial Bank Limited (MCB)
 United Bank Limited
 Habib Metropolitan Bank Limited
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BANK ALFALAH LIMITED
Bank Alfalah Credit Card
Your Bank Alfalah Credit Card is your partner everywhere and is globally
accepted and welcomed at locations displaying the VISA logo. It is accepted
at nearly 27 million locations in more than 150 countries around the globe
and over 22,000 Bank Alfalah’s establishments in Pakistan.
Alfalah VISA lets you pay for shopping, travel, entertainment, meals and
much more. Card members are facilitated through a number of promotions
from time to time. In addition, there are a number of strategic business
partnerships with leading local and international brands for purchase of home
appliances at exciting Step-BY-Step (SBS) monthly installment plan with free
home delivery at lowest interest rates. Salient features are:
• No Joining / Annual / Renewal fee

• Electricity, Sui Gas, PTCL and Warid bills payment through 24 hour Call
Center and Auto Debit instructions
• SMS for card usage, mini statement, payment receipt confirmation, etc.
• Cash withdrawal at all 1LINK ATMs
• Special offer on Warid post paid connections
Rush now to avail matchless features offered by Alfalah VISA.
Platinum
Card
It is accepted at nearly 27 million locations in more than 150
countries around the globe and at over 22,000 establishments in
Pakistan.
Titanium
Titanium MasterCard is your partner everywhere and is globally
accepted and welcomed at locations displaying the MasterCard
logo.
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Gold & Silver

A perfect card combination for all segments of salaried &
professional individuals.
Young Professional
This Card is for you, if you are:
• a Graduate...
• has just started your Career.
As a Classic Blue Cardholder you have a privilege of having access to

all features of Alfalah VISA Credit Cards including two free
supplementary cards.
Women Exclusive
Now for the first time in Pakistan, Bank Alfalah has introduced a
credit card exclusively for women. This card has its unique features
which have been tailor made for women in Pakistan.
Student Card
For the first time in Pakistan, Bank Alfalah introduces a credit card for
Students. This card is for you if you are enrolled in a professional
university (as per Bank Alfalah’s approved list) with 15 years of
schooling experience.
Now you can pay your fee, buy books or just with Alfalah
VISA... :-) Not only this but you will also earn reward points and can
redeem them for a TV, Mobile Phone, CD player & DVDs etc.
Supplementary Card
Now you can give Free Supplementary Cards to anyone you care for.
All Bank Alfalah Basic Card members can apply for supplementary
cards in separate categories including Son’s Card, Daughter’s card
(children who are above 13 years of age) and House Staff’s card. This
feature has been introduced for the first time in Pakistan, yet another
beginning made by Bank Alfalah Credit Cards. In addition,
supplementary cards can be issued to anyone you like thus giving
you complete freedom of choice (Only 1 supplementary card will be
issued to Awami Card holder).
Visa Mini
Visa Mini is a practical and convenient part of your everyday life -
whether you go for shopping, dine out, buy grocery, want to go for
holidays or feel like buying something of interest while you are out
just for a jog!
You can take it with you anywhere you like with no hassle as it has a
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perforated hole in the bottom left corner making it attachable to your

key chain, mobile phone or other day-to-day carry along device.
• 43% smaller than the regular sized credit card with the same
features and benefits.
• Accepted at over 27 million merchants worldwide and around
22,000 establishments in Pakistan (used on electronic POS
terminals only).
• Has the same security features as the regular sized Alfalah

VISA credit card.
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Schedule of Charges
The following Schedule of Charges is associated with your Alfalah VISA

Platinum Card & Titanium MasterCard.
Schedule of
Charges
Service Fee 3.00% per month (36% APR) on cash advance
3.00% per month (36% APR) on retail transactions
1.50% per month (18% APR) on BTF transactions
1.75% per month (21% P.A. flat rate) on SBS transactions (APR 31.23%
to 36.74%)
Step-By-Step (SBS) - Factors & APR details:
Installment
Plan Factor APR
3 months 0.350833 31.23%
6 months 0.184167 35.15%
9 months 0.128611 36.36%
12 months 0.100833 36.74%
18 months 0.073056 36.68%
24 months 0.059167 36.22%
30 months 0.050833 35.66%
36 months 0.045278 35.07%
0.99% per month (11.88% P.A. flat rate) on BTF to SBS transactions
(APR 17.73% to 21.44%)
BTF to SBS - Factors & APR details:
Installment
Plan Factor APR
3 months 0.343233 17.73%
6 months 0.176567 20.09%
9 months 0.121011 20.90%
12 months 0.093233 21.25%
18 months 0.065456 21.44%
24 months 0.051567 21.37%
30 months 0.043233 21.21%
36 months 0.037678 21.01%
24% APR on Credit on Phone to SBS Transactions
Credit on Phone to SBS - Factors & APR details:

Installment
Plan Factor APR
3 months 0.34675 24.00%
6 months 0.17853 24.00%
9 months 0.12252 24.00%
12 months 0.09456 24.00%
18 months 0.0667 24.00%
24 months 0.05287 24.00%
30 months 0.04465 24.00%
36 months 0.03923 24.00%
Late Fee Rs. 600/- or 10% of minimum amount, whichever is higher.
Cash Payment Rs. 100/- per transaction.
Processing fee
Merchant Discount Upto 5% of transaction amount.
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Charges
VISA Mini Card Rs. 500/-
Supplementary Fee
Cash Withdrawal Fee:
- Cash Advance Rs. 500/- or 3% of cash advance amount, whichever is higher
Fee/Call & Pay Fee
1% of cash advance amount
- Acquiring Bank
Charges 1% of transaction amount or Rs. 300/-,
whichever is higher
- Acquirer Cash
Counter Fee
(off us cards)
Cheque / Cash Pickup Rs. 200/- (available in cities having Bank Alfalah
Fee branches)
Over Limit Fee Rs. 600/- or 2% of Over Limit amount,
whichever is higher
Voucher Retrieval Local: Rs. 350/- and International: Rs. 800/-
Fee
Card Rs. 500/-
Replacement/Upgrad
e Fee
Cheque Return Rs. 800/-
Charges/
Rejected Auto Pay
Service Fee
Duplicate Statement Rs. 200/- (whenever 1 month old)
Charges
Step-By-Step (SBS) / 2% of transaction amount
Credit on Phone
to SBS Processing
Charges
Step-By-Step (SBS) / 5% on balance amount or
Credit on Phone Rs. 1,000/-, whichever is higher
to SBS Premature
Settlement Charges
Credit Cover 0.50% of outstanding amount
Premium
Utility Bill Payment Rs. 25/- per utility bill
Charges
Platinum / Titanium Upto US $4.71 per annum
Priority - Annual Fee
Platinum / Titanium Upto US $28.25 per visit
Priority - Airport
Lounge Visit Fee
SMS Alert Fee Rs. 25/- per month
Mobile Banking Fee Rs. 5/- per transaction
Mobile PIN Issuance Rs. 10/- per PIN
Foreign Transactions Upto 5% over prevailing market rate or as per SBP directive. Third
currency transactions will be first converted into US Dollars as per rate
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quoted under arrangement with VISA and MasterCard. Cross border

transaction fee will also be charged as per VISA / MasterCard rules.
Arbitration Charges US$ 500/-
Insurance Plans Rs. 100/-
Cancellation Charge
(Life & Education
Insurance Plan)
Chip Maintenance Rs. 300/- for Principal Card member
Fee Rs. 300/- for Supplementary Card member
Page 23 of 57
Bank Alfalah Home Finance
The crown jewel of our Home Finance scheme, the golden opportunity for
someone starting a career to buy an already constructed housing unit early
in life! We offer a moratorium of upto 3 years in principal payments, for a
financing of upto 20 years. You service only the mark-up element initially,
and principal repayment starts after the end of moratorium period.
Home Start is specially designed for young professionals to own a quality

asset.
With this facility, you no longer need to just dream about the home you want
for yourself and your family .We will provide you upto 80% of the purchase
price of the property, so that you can realize your dream and enter the
reality of owning a home!.
Payment period ranges from 3 to 20 years.
Page 24 of 57
You own a plot but need financing to construct a home that excites everyone
in your family! No problem. We will provide up-to 100% of the construction
cost enabling you to say good-bye to rent forever! Even if you don't have a
plot, we will provide upto 60% of the value of the plot that you have selected
to purchase!
Do we excite your imagination?
Payment period ranges from 3 to 20 years.
You already own a home, but need extra space for a growing family or want
to see some rooms get a new look. Simply apply for financing of upto Rs.
3.50 million or 40% of the surveyed value of your home and get yourself
the extra space!
You can stretch your payments for upto 10 years.
Does your existing installment on a home finance leave you with nothing to
spend? You need not worry any more because we have genuinely attractive
rates and flexible payment options that could leave more funds with you
each month. With our Home BTF, repaying your home finance will not make
you break into a sweat! Transfer upto 100 % of the existing finance.
Stretch your repayment period for upto 20 years once again!

Page 25 of 57
Page 26 of 57
Bank Alfalah Car Financing
• Quickest processing.
• No hidden charges.
• Minimum down payment.
• Complete repayment at any point of time.
• Balance transfer facility {BTF} for existing as well as new clients from
other Banks.
• Tenure period ranging from 1 to 5 years.
• Financing of all brand new locally assembled vehicles and used cars.
• Financing limit ranging between Rs. 200,000/- to Rs. 2,000,000/- for
brand new cars.
Corporate & Individual Car Leasing
BAL’s recently introduced car leasing facility for individuals and corporate
sector has set new dimensions for the product. Now you are provided with the
option of either to get the vehicle leased or financed.
Insurance
Renowned and reliable Insurance companies are offering the competitive

rates of insurance. Pay year insurance premium in advance {at the time of
down payment} and the remaining in the subsequent equal monthly
installment.
How Much Extra Money Being Paid? {Mark-Up}
Bank Alfalah's mark-up rates are as follows:
Repayments
Easily affordable installments on monthly basis in the form of post-dated

cheques will set you free of depositing your rental cheques every month.
Security
Hypothecation of vehicle in the name of Bank Alfalah Limited.
You Can Act As a Co-Borrower
Acting as a co-borrower will enable your family members {spouse, children-

18 year and above} to avail the financing facility and get the car registered in
their names as well.
Page 27 of 57
• Two passport size photographs.

• Copy of National ID card.
• Bank statement for the last six months.
• Salary certificate {for salaried individual}.
• Business proof {for a business person}.
• N.T.N Certificate.
• Co-borrower’s NIC copy {if the car is to be in the name of the co-
borrower}.
Yes you can get a car loan form Bank Alfalah to purchase a brand new car if
you are:
• Pakistani National Identity Card holder.

• Over 20 years of age (Maximum 60 years in case of salaried and 62 in
case of a business person at the time of maturity of the loan).
• Salaried, businessman or self employed.
Financing Product 1Yr 2Yr 3Yr 4Yr 5Yr
14.00 14.50 15.00 15.50 15.50

Car Loan for Brand New Vehicles
% % % % %
16.00 16.00 16.00 16.00 16.00
Car Loan for Brand New Imported Vehicles
% % % % %
15.50 15.50 15.50 15.50 15.50
Car Loan for New Commercial Vehicles
% % % % %
Car Loan for Used Vehicles (Local Assembled 17.00 17.00 17.00 17.00 17.00
Only) % % % % %
Page 28 of 57
Car Loan for Internal / External BTF (Local 16.00 16.00 16.00 16.00 16.00
Assembled) % % % % %
17.00 17.00 17.00 17.00 17.00
Car Loan for Internal BTF (Imported)
% % % % %
Corporate Discount Rate

A Corporate Discount of 0.5% shall continue to apply on all above mentioned rates.
Page 29 of 57
Bank Alfalah Debt Card:
CARRY YOUR BANK ACCOUNT WITH YOU WHEREVER YOU GO WITH

ALFALAH HILALCARD...!
Alfalah HilalCard is the revolutionary, new-age form of cash that provides

you greater freedom, security and convenience, combined with the wide
reach of Visa Network.
This single card brings just about everything within your reach. Now, you can
use your Alfalah HilalCard for all your financial needs around the world,
round the clock, wherever Visa cards are accepted, locally and
internationally.
Alfalah HilalCard - The International Visa Debit Card
The Alfalah HilalCard is an International Visa Debit Card which gives you an
unlimited access to your current / savings account with a simple swipe, at
millions of retail shops and ATMs, worldwide.
Why Should you apply for the Alfalah HilalCard?
• No Interest
• No Minimum Income Requirement - all you need to do is open an
account in any branch of Bank Alfalah Limited
• No PIN required for Retail Transactions
• Accepted at more than 1 Million ATMs and 27 Million retail outlets

around the world.
Page 30 of 57
BANK AL-HABIB LIMITED
Bank AL Habib Limited offer Consumer Loan facilities to its eligible customers.
These facilities are tailored to suit customer requirements with competitive
rates and an easy means of payment. We have the solution whether it may
be for a brand new car or a house (building/renovating a house).
Bank AL Habib Limited offers Auto Loan facility to its customers, a facility with
a minimum down payment, easy monthly installments and a low rate mark-up
making it the best deal in town.
Product Benefits and Features

• Easy to apply
• Financing available for imported and locally assembled cars (new &
used)
• Minimum Loan: Rs 250,000, Maximum Loan: Rs. 2,500,000
• Maximum loan period up to 7 years for new cars & 5 years for used &
imported cars.
• Affordable monthly installments.
• Convenient repayment modes
• No Pre-payment penalty.
• Choice of reputable insurance companies at attractive terms.
• Personalized customer service.
Our highly trained executives will take care of your financing requirements.
The only thing you need to worry about is choosing the car and its color.
Auto Loans Eligibility
You can get a car loan from Bank AL Habib to purchase the car of your choice
if you are:
• Pakistani National Identity Card Holder.

• Over 20 years of age (Maximum 60 years in case of salaried and 64 in
case of a business person at the time of maturity of the loan).
• Salaried person, Businessman or Self employed.
Documentation Required (Salaried Individual)

• Two recent passport size photographs.
Page 31 of 57
• Copy of Computerized National Identity Card.

• Bank statement for the last 3 months.
• Salary certificate/Salary Slip.
Documentation Required (Self - Employed

Individual)
• Two recent passport size photographs.
• Copy of Computerized National Identity Card.
• Bank statement for the last 6 months.
• Business Proof.
Terms and Conditions

The Auto Loan Facility offered will be subject to the following conditions:
• Our Internal credit approvals.

• All offers and criteria listed on this website are subject to change
without any prior notice.
The Home where your heart is
Decent homes are difficult to purchase in today’s ever-changing world of real

estate prices. Safe & comfortable shelter is the prime necessity for each
individual. So let Bank AL Habib with its Home Finance solution provide you
with the means of buying, constructing or refurbishing your ideal home.
- Home Buying
- Home Construction
- Home Improvement
Realize your dream with the Bank AL Habib Home Buying facility where you
can own your personal property. This scheme offers you to buy & own your
dream home Eligibility Criteria
- Pakistani National
Page 32 of 57
- Salaried or Self Employed

- Minimum 23 to Maximum 57 Years Old
- Minimum Net Salary Rupees 20,000/=
Salient Features
Finance Amount
- Maximum amount Rs. 10,000,000/=
Finance Tenure
- Flexibility of up to 20 Years financing
Bank AL Habib will help you as our eligible customer to build the house of
your dreams!
Eligibility Criteria
Salient Features
Finance Amount
Finance Tenure
- Maximum 20 Years
For Bank AL Habib, eligible customers, who wish to renovate their homes to
meet the changing needs of their family.
Page 33 of 57
Salient Features
Finance Amount
Finance Tenure
- Maximum 7 Years
Rates for Mortgage Loans (re-priced yearly at the anniversary)

Salary
Other Details Self Employed
Transfer Other Account
(Tenure and/or Basis
Account Holders
Period etc.) Businessman
Holders
First Year 13% 13.50% 14% floating
Subsequent 12MK 12MK 12MK
floating
years +250 BPS +300 BPS +350 BPS
MUSLIM COMMERCIAL BANK LIMITED (MCB)
MCB Pyara Ghar

Apna Ghar Pyara Ghar
Desire a home of your own? Want to renovate your existing home? MCB Pyara
Ghar now provides you with all you want as you can renovate your existing
home, buy or construct a dream house that you always envisioned for you
and your family. After all, "Apna Ghar... Pyara Ghar"
Flexible
Financing up to Rs 20 million
Financing Tenures from 2 to 20 years
Options to buy construct or renovate your house or flat
Option for partial payments
Option for early payment.
Affordable
Lower mark up rate
Loans up to 80% of the value of your house or flat
Option to club your spouse's income to avail higher financing limits
Equal monthly installments
Page 34 of 57
Speed
Fast & hassle free processing of application
Special Benefits
Hassle Free Process to transfer your similar facility from any other bank at
a discount.
Ease
Doorstep service and assistance from our dedicated sales staff to fill and
submit application along with documents.
Availability
Available in all major cities i.e. Karachi, Lahore, Faisalabad, Rawalpindi and
Islamabad.
Existing Customers
Get discount if you are already a customer of similar facility of any other
bank.
Page 35 of 57
MCB Car4U
Kahin na Kahin tau Hai 1 Car 4 You
Need a new car or a used one? Like locally manufactured or imported cars?
MCB Car4U can give you all ... MCB Car4U through its flexibility, affordability,
speed and other special benefits makes you keep up with the fast pace of
life ... because we know Kahin na Kahin tau Hai.. 1 Car4U.
Flexible
Option for financing or leasing
Financing tenures from 1 to 7 years
Options for new as well as used cars
Option for local as well as imported cars
Financing up to Rs. 20 lacs
Option for early payment.
Option for Replacement Loan
Option for first year insurance financing
Affordable
Lower mark-up rates
Lower insurance rates
Only up to 10% down payment
Equal monthly installments
Speed
Fast and hassle free processing of application
Priority delivery on different vehicles
Special Benefits
Option to pay your 1st installment after 3 months
Pay your down payment after your loan is approved
Availability
Currently available in 16 major cities:
Karachi, Lahore, Faisalabad, Rawalpindi, Islamabad, Quetta, Multan,
Peshawar, Hyderabad, Sialkot, Gujrat, Gujranwala, Sargodha, Mirpur (AJK),
Jhelum, and Sahiwal.
Will soon be launched in Rahim Yar Khan, Sukkur, Mianwali, Abbottabad,
Mardan and many more cities
Page 36 of 57
Existing Customers
Get 1 % discount if you are already our customer for Personal Loan, Pyara
Ghar or Business Sarmaya.
If you are our branch customer, you can avail this facility anywhere in
Pakistan.
Page 37 of 57
Smart cards / Debit CARDS
MCB now brings you MCB Smartcard -a secure and convenient instrument of
payment with unmatched functionalities. It provides 24-hour direct access to
your bank account.
The convenience and flexibility of MCB Smartcard will help you live a
smarter life. It not only helps you manage your expenses, but also eliminates
undue interest on your day to day credit card transactions. Your balance is
always within your reach and you spend accordingly.
MCB is the only bank to introduce a debit card that gives the option to choose
from domestic and international cards for local and global usage respectively.
You can avail the following functionalities on your MCB Smartcard
Smart Features.
SmartCard is your debit card for cash free convenience. Use it for your
shopping and purchases at a rapidly growing nationwide network of merchant
locations including petrol pumps, stores, bakeries, departmental stores,
jewelers, travel agents, restaurants, chemists, hospitals etc.
It’s simple, safe and convenient to use:
Shop at locations displaying the Cash Free sign and the MCB Cards logo.
For payment, no need to pay cash. Simply present your card.
Merchant will swipe your card for the amount of the transaction.
You simply authorize your transaction by entering your PIN (Personal

Identification Number) yourself. The PIN is for extra security.
The purchase amount is debited from your account
To make your transaction safe and secure, MCB has installed State of the
art smart terminals at your merchant locations, to ensure your personal
convenience. At restaurants & fuel Stations your merchant will bring
portable terminals to you for your PIN entry.
Smart Support
Whether you are traveling for business, vacation, or performing Haj or Umrah,
SmartCard gives you access to your bank account in Pakistan. Your
International SmartCard with Maestro and Cirrus logos is welcome at over 5
Page 38 of 57
million merchant establishments displaying the Maestro signs at their outlets.

In addition, your card is accepted at 634,000 ATMs with Cirrus logo.
Your international SmartCard gives you round-the-clock convenience and

helps avoid unfavorable exchange rates of money changers as well as time
wasted in providing documentation while converting traveler cheques.
Page 39 of 57
MCB VISA
MCB Visa is not just another card in your wallet. It not only provides the
conventional credit card services in a manner that is superior in comparison,
but goes an extra mile.
Makes MCB Visa the most affordable credit card in your

wallet.
MCB VISA offers you a wide range of products that will cater
to your diversified taste perfectly.
Intelligent Reward Monitoring and Redemption System.
Buy now and pay off latter in easy and affordable monthly
installments!
Saving you from the hassle of making multiple payments on

your various credit cards.
You need cash and want to pay back in installments. Just Dial
for it!
Life is too precious to be spoilt by unforeseen events and

mishaps.
Page 40 of 57
How About a credit card that acts like hard cash.
Now Experience peace of mind of having a credit card free

from fraud or misuse!
Page 41 of 57
SCHEDULE OF CHARGES
Gold Classic
Joining Fee FREE FREE
Annual Fee FREE FREE
Chip Maintenance Fee upto PKR. 500 p.a upto PKR. 350 p.a
Supplementary Annual Fee FREE FREE
Supplementary Chip Maintenance Fee PKR. 300 p.a PKR. 300 p.a
Service Fee/Markup on Cash Transactions

2.83% per month translated into an APR of upto 34% calculated on daily
unpaid balance from date of transaction
Service Fee/Markup Retail (Fixed APR)
2.83% for service fee/markup per month translated into an APR of upto 34%
Service Fee/Markup Retail (Variable APR /i-revolve)

Upto 35% to 30% APR based on continuous revolving of per retail transaction
for six months or above
This is charged on per retail transaction basis from an APR of 35% in the first
revolving month and based on revolving of the transaction the rate continues
to decline each month for six months to a minimum of 30% i.e. sixth revolve
month and continues at this rate till the transaction is fully paid.
Month APR (upto) Per Month

1 35% 2.91%
2 34% 2.83%
3 33% 2.75%
4 32% 2.66%
5 31% 2.58%
6 and beyond till the transaction is not fully
30% 2.5%
settled
Late Fee
Rs.600/- or 10% of minimum amount due which ever is higher
Cash Advance Fee

Rs.500/- (per transaction) or upto 3% of the cash advance transaction amount
(whichever is higher) plus all charges passed on by the acquiring bank
Cheque/Cash Pickup Fee

PKR. 200/-
Over limit Fee

PKR. 500/ -
Voucher Retrieval Fee

Local: PKR. 250/- per document Foreign: PKR. 800/- per document
Page 42 of 57
i-insure
Package 1: PKR 600,
Package 2: PKR 300,
Package 3: PKR 200,
Wallet Protection: PKR 75 per month
Credit Security
upto 0.40% of total monthly outstanding balance
i-plan
APR Starting from 17.93% upto 21.28% Processing Fee: PKR. 250/- per
transaction Prepayment Charges: PKR. 500 or 5% of outstanding installment
balance (whichever is higher)
i-dial
APR Starting from 17.93% upto 21.28% Processing Fee: Bank remittance
charges plus PKR. 350 (per request) or upto 3% of amount requested
(whichever is higher) Prepayment Charges: PKR. 500 or 5% of outstanding
installment balance (whichever is higher)
i-switch
APR Starting from 17.93% upto 21.28% Processing Fee: Upto 3% of
transferred amount or PKR. 350/- (whichever is higher)
Arbitration Charges for Disputed Transactions

USD 500/- or equivalent
Card Replacement Fee

PKR 500 for Gold, PKR 350 for Classic and PKR 300 for Supplementary
Cheque Return Charges / Insufficient funds on Auto Debit

Upto PKR. 600/-
Pay Order / Demand Draft Issuance Fee

Upto PKR. 500/-
Cash Payment Processing Fee

Upto PKR. 100/- per bill for MCB account holders
Upto PKR. 200/- per bill for non-MCB account holders
Duplicate Statement of Request

PKR. 300/- per statement (more than 1 month old)
Foreign Transactions
5% over prevailing market rate or as per SBP directive. Third currency
transactions will be first converted into US Dollars as per rate quoted under
arrangement with Visa. Cross border transaction fee will also be charged as
per Visa rules
Page 43 of 57
Credit Worthiness Certificate

1 Certificate per 6 months – Free Subsequent requests - PKR. 200/- per
certificate
Supplementary Chip Maintenance Fee

PKR. 500/- per Cheque
Plan Conversion Fee

Upto PKR 200
Page 44 of 57
UNITED BANK LIMITED
You as an individual can gain and benefit the most through UBL Consumer
Banking. In UBL you get friendly, efficient and attentive personalized banking
services - a unique banking relationship experienced by each UBL client. You
can utilize the following services.
UBL Address
UBL Drive
UBL Credit Card
Owning a house of your very own is a cherished dream. A lot of planning and
hard work is involved in making this dream come true. That is why, at UBL
we aim to make your decision easier, by offering you the right ingredients
that can help you realize your dream with absolute convenience.
UBL Address empowers you to become the proud owner of a home by offering
a variety of product and pricing options that are flexible yet affordable. So
choose the best product option and pricing to suit your needs.
All product options are amortized and range over a tenor of 3 - 20 years.
Buying a Home
Why rent when you can buy? Buying a home of your choice has never been so
easy. With a maximum financing limit of 80% you can easily buy a house or
apartment that best fits your requirements. So go ahead and start the search
for your dream home because with easy and affordable installments you need
not think of renting a house when you’ve got UBL Address.
Building a Home
Have you ever settled for anything less than perfect? There’s nothing like
building your perfect home, your way. With every detail in place like the
elegant French windows or the perfectly manicured lush green lawn, just the
way you’ve always imagined. By chalking out well planned fund trenches at
each phase of the building process, UBL Address brings you your dream
house one step closer.
Land Plus Construction
What do you do with an empty piece of land? Construct your dream house
with all the aesthetic details you’ve ever wished for. UBL Address helps you
through every stage of construction by providing you with well planned out
fund trenches so that you can better manage your construction.
Page 45 of 57
Floating & Adjustable Rate Options
Enjoy unparalleled freedom by choosing the most flexible and affordable

rates. Be in control of your financial outflows by opting for a pricing plan
that’s most suitable for you:
Floating Rate
In this option, you get a fixed rate for a period of 12 months, which gets re-
priced annually. (Upward or downward, only to the extent of Kibor)
Adjustable Rate
Your mark-up rate will be fixed for a period of 3 years, and will be adjustable
after the fixed rate period. However, after completion of 3 years, the rate will
be floating and will be revised annually (upward or downward only to the
extent of Kibor
Minimum monthly income: Rs.15,000

Age: 23 to 65 years
Resident Pakistani
Self-employed businessman/professional or salaried individual
Minimum loan size: Rs. 500,000.
Markup Rates
Both Floating and Adjustable Rate Options are available. The Floating Rate
Option is subject to annual revision from the time of loan booking. Any
change in the mark up rate may be either upward or downward revision (if
required) after every twelve (12) months from the date of the booking of the
loan (upward or downward only to the extent of Kibor).
Markup rates are calculated on the basis of the prevailing one year Karachi
Inter-Bank Offered Rate (KIBOR*) which is taken as the base rate. A margin
that varies from one pricing option to another is charged over and above the
base rate, the details of which are as follows:
Segments Pricing
Salaried KIBOR* + 3.5% = Applicable Markup Rate
SEB/SEP KIBOR* + 4.5% = Applicable Markup Rate
Page 46 of 57
The applicable markup rate will be the rate prevailing at the month of
booking. This will be communicated to the applicant through the Repayment
Schedule -
* KIBOR is defined as the average rate “ask side” for one year tenure as
published on Reuters Page KIBOR or as published by Financial Market
Association of Pakistan in case Reuters Page in unavailable.
Page 47 of 57
UBL Drive is a unique auto financing product which offers you features,
options and flexibility unmatched by any other bank, because at UBL, You
come first.
New Car Financing

UBL Drive allows you to drive away in your own car by making a down
payment of just 15% and to top that with low monthly installments.
Used Car Financing

With UBL Drive you can buy your favorite used car (up to 5 years old) at the
most affordable rates.
Cash Your Car

UBL Drive is not just a car loan; it’s a financing facility that gives you Cash on
your car, you can get up to 75% of your car value. Drive in with your car and
drive out with cash.
No Down Payment Before Approval
UBL Drive is the quick and hassle free route to the car of your choice. Offering
you for the first time in Pakistan, No Down
Payment and processing charges till your application is approved. After

approval, you can take your Purchase Order to any of our authorized dealers,
pay the Total Cash Outlay amount and simply drive away with your preferred
car
Simple and Convenient Process

Just bring the car of your choice to an authorized dealer for evaluation of
value and get your car financed at the spot. No third party appraisal and no
additional hassle.
Low Installment & Flexibility

In our fixed plan, you are offered a variety of affordable rates and installment
plans, suiting your needs.
Page 48 of 57
Pays (Pay As You Select)

For the first time in Pakistan, UBL Drive allows you to choose from different
repayment options to suit your present & future expected cash flows:
Pays-up
You can design your own repayment plan with installments increasing every
year, starting with low installments to suit your cash flows.
The graph below indicates the increasing trend of monthly installments you
will be paying over the life of the loan.
Pays-down
Step down allows you to pay higher at the beginning with your installment
reducing in subsequent years. Your total payment during the duration of the
loan remains very affordable.
The graph below indicates the declining trend of monthly installments you will
be paying over the life of the loan.
Processing Charge
A processing charge of Rs. 4,000 will apply.
Page 49 of 57
Credit Card
Welcome to the world of UBL Credit Card, the most exciting and vibrant credit
card brand in Pakistan. We offer you a range of innovative and exciting cards
that is not only powered by the security of chip but also enable you to
personalize it any way you want. In order to get more information on our
credit cards range.
UBL CREDIT CARD … MAZAY MEIN RAHO!

Welcome to the world of UBL Credit Card. Pakistan’s 1st Chip Credit Card that
guarantees you both enjoyment and high value. It assures you global
acceptability in more than 22 million establishments worldwide in 130
countries and in more than 12, 000 outlets within Pakistan.
CHIP based credit cards have globally proven to be the most secure way of
conducting credit card transactions. This unique high tech CHIP guarantees
your financial security while conducting transactions on credit cards, both
within Pakistan and around the world.
FEATURES & BENEFITS

Your UBL Credit Card’s exciting and value added features will change your life
in a manner which will ensure that you constantly enjoy living it.
Cash Advance
You can now withdraw cash through your UBL Credit Card’s instant cash
advance facility from any designated UBL Card Payment Branches nationwide
and more than 780,000 ATMs and financial institutions worldwide displaying
VISA/PLUS logo.
The service charges for cash advance will be applied from the day of the
transaction. A cash advance fee will also apply for each cash withdrawal.
Buy Today, Pay Later

Your UBL Credit Card gives you the financial flexibility to buy today and pay
after a month at no extra charge. You have the option of paying a minimum
Page 50 of 57
5% of the outstanding balance or any other amount of your choice up to your

total account balance.
A service charge of only 3% per month will apply to whatever remaining

unpaid balance that is carried forward.
Credit Guardian
UBL takes care of its Credit Card members payments in time when they
cannot. Our Card members can now get total peace of mind and insure
themselves against unforeseen emergencies. In the event of any temporary
disability where UBL Card member is unable to pay his/her monthly dues,
Credit Guardian will allow payment of the outstanding monthly amount.
Moreover, in the unfortunate event of permanent disability or death, the
entire outstanding amount will be waived off. Credit Guardian Facility is
available for a minimal fee, charged automatically on the card balance every
month.
Free Travel Accident Insurance

Each time our Card members use their UBL Credit Card to purchase airline,
train or bus tickets, they are automatically covered against any sort of
accident that might befall them while traveling:
The coverage amounts are:
Classic Card: Up to Rs. 3.5 Million

Gold Card: Up to Rs. 7 Million.
Page 51 of 57
HABIB METROPOLITAN BANK LIMITED
HMB Auto Finance

HMB Auto Finance is available up to Rs. 3 Million
Minimum Down Payment is 15% of the total amount.
Processing Fee is Rs. 3,000/-.
Vehicle to be registered in the name of customer and marked HPA with the
Bank.
HMB Auto Leasing

HMB Auto Leasing is offered to all our Commercial & Corporate Clients.
Minimum down Payment is as low as 10% of the total amount.
Auto lease limit depends on the strength of the Company’s financials and
credit checks.
A Processing fee is charged at 0.25% of the Lease amount.
The Vehicle is to be registered in the name of the Bank
The Insurance cost to be borne by the customer.
HMB Personal Loans

Clean loans are offered up to Rs. 500,000/- .
A Processing Fee of 1% of the loan amount or Rs. 1,500/- is charged.
Page 52 of 57
HMB Education Loans

Financing for Education Loans are available for
Graduation
Post Graduation
PHD
Diploma courses
Financing for Tuition fee, Books and materials.
A Mark–up is charged at confessional rate.
There is No processing fee.
Convenient repayment options are offered.
The Tenor is from 6 to 60 months.
Rates And charges

Education
Personal Loan Auto Finance Auto Leasing
Loan
Salaried Upto 3 years 14.5%
19% 13.5%
Person More than 3 years
15.5% Minimum 14%
Imported Cars Maximum
Businessme 16.5%
22% 16.5% 13.5%
n
Imported Cars
16.5%
Minimum
Rs. 25,000/- Rs. 100,000/- Rs. 100,000/- Rs. 25,000/-
Loan
Maximum Rs.
500,000/- Rs 3,000,000/- Blanket limit
Loan 100,000/-
Rates* Floating Floating
* Six months Kibor rate.
* Rates to be reviewed every 6 months and revised if KIBOR is increased

more than 0.5%.
Page 53 of 57
SUMMARY
S.N AUTO FINANCE HOME FINANCE EDUCATION LOAN

BANKS Duratio Duratio Amoun Marku
O Amount Markup Amount Markup
n n t p
2,00,000 3,500,00
Bank Alfalah to 14% to 3 to 20 0 14% to 1 to 5
1. - -
Limited 2,000,00 17% years maximu 15% years
0 m
2,50,000 2,500,00
Bank Al-Habib to 10% to 7 to 20 0 to 13% to 5 to 7
2. - -
Limited 2,500,00 20% years 10,000,0 14% years
0 00
Upto Upto
Muslim Commercial Upto 10% 2 to 20 13.5% to 1 to 7
3. 2,000,00 20,000,0 - -
Bank Limited (MCB) only years 14% years
0 00
Upto
3 to 20 Minimum 12% to Upto 5
4. United Bank Limited 2,000,00 Upto 15% - -
years 5,00,000 16.5% years
0
1,00,000 25,000
Habib Metropolitan to 14.5% to to
5. - - - - 13.5%
Bank Limited 3,000,00 16.5% 1,00,00
0 0
BANKS BEHAVING LIKE CARTEL, FLEECING DEPOSITORS:
REPORT
Banks in Pakistan are earning windfall profits by taking undue advantage of

the weak regulatory framework and are behaving like a cartel within the
policy space provided to them by the State Bank.
This has been stated in a report, Consumer financing in Pakistan: issues,

challenges and way forwarded, launched by the Consumer Rights Commission
of Pakistan (CRCP) and the Asia Foundation on Friday.
According to the report, consumer financing has significantly contributed to

the economic turnaround of the country by stimulating consumption and
investments. There has been a phenomenal increase in the private sector due
to easy availability of credit.
However, the report said, the manner in which consumer financing was being
delivered had seriously jeopardized the competitiveness in economy.
The most important issue is that Pakistan has one of the highest interest rate
spreads in the world, Hamid Siraj of the CRCP said while explaining details of
the report.
He said that an analysis of the interest rate behavior in Pakistan showed that
the spread had vacillated between 5.95 and 9.58 per cent during the period
from 1990 to 2005. In recent years, the spread has exceeded seven per cent
on an average.
The report says the high interest rate spread indicates that competitiveness
in the banking sector in Pakistan is either absent or very poor. This issue is
largely attributed to weak regulation of interest rates despite the fact that the
SBP has powers to control the spread through monetary policy. While non-
operating loans and high administrative costs could be considered as major
reasons in countries where the spread is high, these cannot be said to be true
of Pakistan because banks are earning huge profits at the cost of savings of
depositors. High interest rate spread is damaging the competitiveness in the
economy in general and in the financial sector in particular.
The report says the State Bank should exercise its powers to determine a
reasonable rate of returns for banks as well as depositors. As a matter of
priority, the interest rate spread should be reduced, at least, to the level of
average spread in the South Asian region.
The banking sector is earning record profits by charging unrealistic and

exceptionally high interest rates. As a result, despite considerable ratio of
nonperforming loans, the annual profitability of banks has reached 76 per
cent on an annual basis over the past few years. This is evident from the pre-
tax annual profit of all banks, which was Rs7 billion in 2000, but jumped to
Rs123.4 billion in 2006. In recent months, deceleration trends are on the rise
in consumer financing due to increasing loan default and use of credit

worthiness information by the banks.
The report says that another critical issue is that almost all consumer loans
are on the basis of variable mark-up, which has reduced the loan-servicing
capacity of borrowers due to progressive increase in the rates. In addition,
the growth in consumer financing has put great inflationary pressure on
economy.
CONSUMER PERSPECTIVE: Acquisition of easy bank credit by household

consumers has spurred the demand for many essential and luxury items.
Ultimately, the increase in demand has not only escalated the prices of
essential items, but has also stimulated hoarding and black-marketing, thus
multiplying the problems for poor consumers. In fact, proliferation of loans
has given rise to new development challenges. Citing an instance, the report
says the need of new roads in metropolitan cities is directly linked with
growth in auto loans provided by the banks.
From a consumer perspective, consumer financing has been helpful in

improving the quality of life of the people who have the capacity of servicing
the loans. However, there is mounting evidence that this capacity is
deteriorating due to high spread and variable interest rates on loans.
Depositors are not getting due returns because of the high difference
between lending and deposit interest rates. Further, the volume of consumer
complaints is rising day by day due to processing delays, service
inefficiencies, hidden charges and poor disclosure practices.
Lack of consumer education on banking terms and conditions, policies, rules

and regulations is also a critical factor in securing financial rights. As the
consumer financing portfolio is increasing, quality of related banking services
is becoming a serious issue.
Processing delays, service inefficiencies, unauthorized debits and non-

compliance with requirement of providing monthly bank statements are few
examples of poor quality of banking services. For example, in the first eight
months of the operation of banking ombudsman in 2005, about 40 per cent
complaints filed with the ombudsman related to consumer products, 30 per
cent of which were related to credit cards alone.
CONSUMER AWARENESS: The study presents a critical analysis of the

regulatory framework for consumer financing, emerging issues from micro
and macro standpoints and the nature and magnitude of consumer
grievances.
Drawing on secondary data sources and user surveys, the study covers all
main consumer financing products, including credit cards, car financing and
leasing, personal loans and house financing. It provides evidence-based
proposals for designing and implementing strategic and practical
interventions to strengthen the regulatory mechanism and consumer
financing sector in the country.
Page 56 of 57
The study also concentrates on issues in consumer awareness on banking

terms and conditions, policies, rules and regulations as a critical factor in
securing financial rights. It says that as the consumer financing portfolio is
increasing, unsolicited banking, processing delays, service inefficiencies,
unauthorized debits, etc., are emerging as main problems for the users of
consumer financing products.
Page 57 of 57

Consumer Financing in Pakistan

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Consumer Financing in Pakistan

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FINANCIAL INSTITUTIONS

Submitted To: Sharique Ayubi

What are the benefits of getting finance?.........4

Types of financing options for Consumers........4

TABLE Credit Card Financing.......................................5

Advantages of buying home.............................7

Disadvantages of buying a home......................8

Consumer finance: what chances of success. .12

Consumer Financing in Pakistan:....................17

Bank Alfalah Limited.......................................18

Bank Al-Habib Limited.....................................31

Muslim Commercial Bank Limited (MCB).........34

United Bank Limited........................................45

Habib Metropolitan Bank Limited....................52

Banks behaving like

WHAT IS CONSUMER FINANCING?

Consumer financing provides individuals the necessary financing for personal

WHAT ARE THE BENEFITS OF GETTING FINANCE?

TYPES OF FINANCING OPTIONS FOR CONSUMERS

CREDIT CARD FINANCING

WHAT IS A CREDIT CARD

CREDIT CARD REPAYMENTS

WHO SUPPLIES CREDIT CARDS

Financial institutions provide their own specific credit cards usually in

THE IMPORTANCE OF A GOOD CREDIT HISTORY

When consumers seek financing for their investments, mortgages and

In particular your credit history is a reflection of information that creditors

CONSEQUENCES OF A BAD CREDIT HISTORY

WHAT IS A HOME LOAN

A home loan (also called a mortgage) is a loan agreement that enables a

VARIABLE VS FIXED INTEREST RATE

ADVANTAGES OF BUYING HOME

 Appreciation of housing value. Over time housing prices gradually increase

 Independence. Provides you with independence and privacy from landlords

DISADVANTAGES OF BUYING A HOME

Below are some disadvantages of buying a home.

 Home prices fluctuations. Depending on when you bought your property

PERSONAL LOAN FINANCING

WHAT IS A PERSONAL SECURED LOAN?

 With secured and unsecured loans

HOW MUCH CAN I BORROW FOR A PERSONAL LOAN?

If property is secured against the loan, is it mortgaged and if so how much?

HIGH RISK PERSONAL LOANS VS. LOW RISK LOANS

WHAT IS THE DIFFERENCE BETWEEN SECURED AND UNSECURED

However in most cases financial institution provide unsecured personal loans.

PERSONAL LOAN INTEREST REPAYMENTS VS. TIME.

The actual repayment of a personal loan depends upon the repayment

Disclaimer, the use of this website provides no actual advice is to be taken,

CONSUMER FINANCE: WHAT CHANCES OF SUCCESS

In a generic sense, institutional arrangements that provide consumers with

Admittedly, consumer finance spurs consumption and demand that is

However, the key to sustaining the consumption-demand equation without

There is considerable truth in the observation that lowering of interest rates

Similarly, households too acquired credit (far in excess of their capacity to

Maintaining the critical balance between savings, investment and borrower’s

The big attraction in extending financing facilities to the passive consumer

But in pricing consumer loans unrealistically high, banks would be making a

As it is ordinary consumers capacity to borrow and repay loans out of their

The sustained trend of depressed demand prevented the development of a

Banks are belatedly trying to redress this enormous macroeconomic

The demand-pull is pushing prices of consumer durables to unrealistic levels.

The expectation wasn't met because rise in demand (purposely prevented

Aside from the macroeconomic distortions that suppress consumer demand,