Govt. to mortgage paddy stocks to state banks
Government is to mortgage its paddy stocks to state-run banks to obtain the required cash to make purchases from farmers in the current season.
The move came after the state-run banks declared they were not in a position to extend loans to the state-run Paddy Marketing Board (PMB) to buy paddy as the debt on previous loans amounting to nearly Rs two billion was still outstanding.
PMB Chairman the Neil Alwis told the Sunday Times approval was granted on Friday to buy 30,000MT of paddy and to obtain a pledge loan of Rs two billion by mortgaging the stocks to the banks.The objective was to ensure that the PMB maintained its own buffer stocks preventing the private sector from collecting most of the paddy stocks, he said.
The state banks had turned out the request for the facility in view of the non-payment of more than Rs one billion by the PMB.