All Commercial Banks

Dear Sirs/Madam,

PROCUREMENT OF WHEAT - MARGIN RESTRICTIONS THEREOF

Please refer to paragraph 5 of BPD Circular No.10 dated April 24, 2004 containing instructions on margin restrictions.

With a view to discourage hoarding of wheat and to ensure stability in the prices of flour and wheat and their continued availability throughout the year, especially during the lean months, at affordable prices, it has been decided:-

a) To impose a cash margin of 50% on fresh disbursements to be made by the banks to private sector for procurement of wheat with immediate effect, and that;
b) the banks shall ensure that the advances provided/to be provided by them for procurement of wheat by private sector are adjusted in full latest by 30th September 2004.

Please acknowledge receipt.