The
Presidents / Chief Executives,
(NBP,HBL,UBL,MCB,ABL), Fourteen Domestic Private Commercial
Banks,
Zarai Taraqiati Bank Ltd. Punjab Prov. Cooperative Bank.Ltd.
Dear
Sir,
REVOLVING CREDIT SCHEME FOR
AGRICULTURE
It
may be recalled that while enhancing / revamping the scope
& eligibility criteria under the Supervised Agricultural
Credit Scheme circulated vide our circular No. ACD /1035-1039/PD
(P) –08/2001 dated 25th April 2001, a scheme namely
“Revolving Credit Scheme” was introduced on the
recommendation of all participating banks as well as Chambers
of Agriculture and Farmers / Growers Associations. The spirit
behind the introduction of the said scheme was to facilitate
the farming community in timely availement of credit without
repeated documentations, bank visits and approvals of the
limits against full repayments.
Since
introduction of the said scheme, various difficulties and
complaints were observed in its implementation and adoption
of different definitions and procedures by each bank. In order
to implement the Revolving Credit Scheme smoothly and uniformly,
it was decided by the Agricultural Credit Advisory Committee
(ACAC) at its meeting held on 4th July 2003, to develop uniform
and standardized definition and procedure, for banks under
Agricultural Loans Scheme in consultation / consensus with
all the participating banks. Accordingly the scheme has been
developed with the salient characteristics as three years
revolving credit with automatic renewal, one time documentation,
partial repayments and annual cleaning of account (Principal
and Markup) at any date convenient to the Borrower. Major
Commercial Banks (ABL, HBL, MCB, NBP and UBL), Domestic Private
Commercial Banks, Zarai Taraqiati Bank Ltd. (ZTBL) and Punjab
Provincial Cooperative Bank Ltd. (only for lending to individuals)
are therefore, advised to introduce the enclosed “Revolving
Credit Scheme” for Agriculture Credit with immediate
effect as per annexure-A.
Efforts have been made by the State Bank of Pakistan to develop
a uniform definition and procedure of the said scheme, in
accordance with the provisions of Banking Laws and Practices,
including Prudential Regulations and without compromising
the security and interest of the lending banks and privileges
of the farming community under the enhanced scope of Agricultural
Credit Scheme. The definition and procedure of the scheme
shall remain unchanged for all the participating banks.
Please acknowledge.
Encl. Annexure-A
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