A.
ADVANCES |
Margin
Requirement |
I. Advances to manufacturing and processing units.
|
Against raw materials and agricultural produces. |
i.
Raw materials to manufacturing/processing units
of capital goods, engineering goods, consumer durable,
medicines, cotton yarn, cotton fabrics, jute goods,
woolen yarn, cigarettes, fertilizer, pesticides, vegetable
ghee and edible oil. |
No
margin |
ii.
Raw cotton (both phutti and lint cotton) to ginners.
Banks are free to determine the
basis of valuation of stocks of cotton offered to them
as security for credit facilities. However, the stock
of cotton may be valued by banks at cost or market value,
whichever is lower for advances to cotton ginners.
While banks are free to lay down
their own lending policies, they are encouraged to also
include in their lending policies, for financing against
pledge of cotton, the aspect of contamination free cotton
as also different grades of cotton and their different
prices, for determining the credit limits of their borrowers.
|
No
margin |
iii.
Paddy and Rice to modern rice mills viz. those
rice mills, which have fully automatic machinery and
have a husking capacity of not less than five tons of
paddy per hour. |
No
margin |
iv.
Raw materials to Iron and Steel Industry as well
as Ship-Breaking Industry. Ship (unserviceable) for
scrapping would constitute raw material for the ship-breaking
industry.
SBP has no objection to banks accepting
ships as collateral at their discretion.
|
No
margin |
v.
Viscose Fiber to manufacturing units
|
No
margin |
vi.
(a) Raw materials to manufacturing/processing
units of goods other than those mentioned above.
(b)
Wheat to flour mills
Banks can provide freely finance
the procurement of wheat by flourmills from any source
in Pakistan and without any time restriction on the
basis of the annual manufacturing capacity of each flourmill.
All finances provided for procurement of wheat shall
be interalia, covered against the pledge/hypothecation
of wheat stocks. |
25%
10
%
|
vii.
Red Chillies |
Banned
|
Against finished goods. |
25%
|
II. ADVANCES TO TRADERS |
Against raw materials and agricultural produce |
|
i.
Rice and paddy to entities other than authorized
dealers, wheat flour, edible oils (refined, un-refined
and hydrogenated) and cotton seeds, |
Banned
|
ii.
Wheat to traders/growers |
15%
|
iii.
Export of rice registered with Superior Rice
Dealers Association, Punjab or Rice Millers and Traders
Association Sindh against basmati rice.
|
No
margin |
iv.
Cotton |
25%
|
v.
Fertilizers and pesticides |
No
margin |
vi.
Rice, paddy and tobacco
to authorized dealers.
Advances to authorized dealers
against rice and paddy shall be given only against such
stocks of paddy/rice, which have been declared to the
Food Department for which
they hold receipt from that Department.
|
25%
|
vii.
Other raw materials and agricultural produce
|
50%
|
viii.
Red Chillies
|
Banned
|
ix.
Sugar
·
Sugar
mills however can be allowed advances against indigenous
sugar and not imported sugar subject to credit control
already in force. Advances against sugar may be valued
by banks at cost or market value whichever is lower.
|
25%
|
x.
a)
Against finished goods.
b)
Finished goods manufactured in Pakistan to those traders
who are registered with GST/Income Tax Department.
|
75%
40%
|
III.
OTHER ADVANCES |
i.
Shares of listed Companies /TFCs
|
As
per Prudential Regulations-VI |
ii.
Bank deposits and deposit certificates.
·
25% margin
is applicable to all forms of certificates including
certificates issued under National Saving Scheme such
as (a) Special Saving Certificate (b) Khas Deposits
Certificates (c) Defense Saving Certificates (d) NDFC
Bearer Certificates (e) Foreign Exchange Bearer Certificates
(f) Any other Government backed securities.
·
Value
of such certificates, sum payable on date of presentation
will be taken for making advances by the banks.
·
Prize
Bonds being issued by Government needs to be given same
treatment as that of other securities issued by Government.
As such banks can provide financing facilities against
Prize Bonds at 25% margin or a margin of 1.5 times of
accrued markup on annual basis which ever is higher.
However, as the value remains stagnant (on account of
lack of interest payments) financing provided against
those Prize Bonds should be for one year.
|
25%
|
iii.
For financing goods, including production machinery,
commercial Vehicles and consumer durables on hire purchase
or installments plan. |
No
margin |
iv.
Against banned imports. |
Banned
|
v.
Real Estates |
No
margin |
vi.
Ships
State
Bank has no objection to banks accepting ships as collateral
at their discretion. |
No
margin |
IV. CLEAN ADVANCES AND
ADVANCES SECURED BY GUARANTEES
|
(There
are no margin restrictions applicable in the case of
bank guarantees; however, banks may exercise their own
discretion in the matter if necessary.)
|
·
Clean
advances
or advances secured by guarantee: - As per Prudential
Regulation-III
|
i.
Agricultural
loan against guarantee/securities
under the scheme for Agricultural Loan by Commercial
Banks circulated vide ACD Circular No.5/72 dated 27-11-1972
and Circular Letter No.ACD./1035-1039/PD(P)-08/2001
dated 25-04-2001as amended from time to time, can be
granted to maximum amount of Rs.100, 000/= and that
total guarantee of one guarantor/person should not in
any case exceed Rs.500, 000/- excepting a processing
unit. |
ii.
c) Rupee
finance to Pakistani firms and companies functioning
in Pakistan against guarantee received from banks functioning
abroad are exempted to the extent of limit of Rs.100, 000/- .
|
V.
ADVANCES FOR EXPORTS
|
The restrictions relating to grant of clean advances
or minimum margin requirements shall not apply to: -
i.
Advances granted to finance export under irrevocable
letters of credit or firm orders upto the amount for
which credit is opened or firm order made.
ii.
Packing credit for export; and
Pre-shipment
credit granted for financing export of goods covered
by firm contract made, or irrevocable letters of credit
opened by foreign importers in favor of exporters in
Pakistan, provided that the advances do not exceed the
amount specified in the contract or the credit, as the
case may be.
|
B.
IMPORT LETTERS OF CREDIT |
For
opening of import letter of credit for the following
items no margin is required: - |
i.
Industrial machinery, agricultural machinery,
components and spares of such machinery.
For the purpose of letter of credit margin the terms
“Industrial Machinery” may be interpreted in a broad
sense to include all capital goods, as distinct from
consumers durable. |
ii.
All raw materials imported by manufacturers of
electrical equipment’s, capital goods and engineering
goods (including cycles and agricultural implements).
|
iii.
Trucks, Bus chassis and Jeeps in CKD condition.
|
iv.
Construction and engineering/equipment.
|
v.
Medicines, drugs and medical and surgical equipment
and appliances. |
vi.
Pharmaceutical raw materials, medicinal herbs
and crude drugs.
|
vii.
X-ray films. |
viii.
Artificial limbs and hearing aids and parts thereof.
|
ix.
Raw materials by manufacturers of fertilizers
and pesticides. |
x.
Fertilizer and pesticides. |
xi.
Raw materials by vegetable ghee and edible oil
industry. |
xii.
Crude oil Petroleum products. |
xiii.
Newsprints. |
xiv.
Vegetable seeds |
xv.
Tea |
xvi.
Books, magazines, Journals and periodicals.
|
xvii.
Second hand clothing. |
xviii.
Raw Jute. |
xix.
Jute Bags. |
xx.
Cements. |
xxi.
Imports by TCP
Imports by TCP have been exempted from compulsory letter
of credit margin requirement, However, domestic letters
of credit opened in favor of TCP in relation to import
of any commodities through them will be subject to the
same minimum margin requirements (based on the C&F
value of the consignment and not the landed cost) as
are prescribed for imports letter s of credit for the
same commodities under general instructions issued from
time to time except in the following cases: -
·
Domestic
letter of credit in favor of TCP for purchase of bleaching
powders
·
In
case of RMR license holders of domestic letters of credit
in favor of TCP (License to be endorsed to the effect
that “imports are being made through TCP”. Not available
for opening of import letter of credit at nil margin)
|
No
margin to the extent of value of RMR license.
|
xxii.
Items under the Tide List.
|
xxiii.
Import under the barter.
|
xxiv.
Raw materials against import license issued under
Export Performance (RMR) Scheme.
|
xxv.
Pulses
|
xxvi.
Raw materials imported by the iron and steel
industry as well as ship-Breaking Industry, Ship (unserviceable)
for scrapping would constitute raw material for the
ship-breading industry.
·
SBP
has no objection to banks accepting ships as collateral
at their discretion.
|
xxvii.
Motor Cycle/Motor Scooter/Auto-rickshaw, three
wheelers in CKD conditions, by those firms only who
have been given sanction by the Ministry of Commerce
for progressive manufacture under deletion program.
|
xxviii.
Industrial raw materials including Soybean Meal
(irrespective of whether importers are industrial consumers
or commercial concern and whether the license have been
marked “industrial” or “Commercial”. Letter of credit
to be opened only if the item is importable under the
import policy and the importer produces an import license.
|
xxix.
Onion. |
xxx.
Potatoes. |
xxxi.
All live animal except swine. |
xxxii.
Cars for disable persons authorized by the CCI
and E under the procedure laid down by the Government
of Pakistan. |
xxxiii.
Sugar. |
xxxiv.
For import of computer/ computer software/hardware.
Banks
are free to determine the margin requirements against
letter of credit established by them for import of computer/microcomputer
and their component. |
xxxv.
Butter
25%
|
xxxvi.
Milk and Cream, including baby food.
35% |
xxxvii.
Items other than those listed above
35%
|
xxxviii.
Caustic Soda (PCT heading 2815:1200)
100% cash margin |