This facility is generally provided against pledge of goods. Under this type of financial accommodation the facility amount is disbursed in specially opened account for the purpose. The pledged goods are released to the borrower against cash payment only. In case the goods pledged are seasonal in nature, the customer would be required to adjust the facility before the season ends. Rollover shall not be allowed.
Policy:-
Basic criteria to qualify for advances against pledge of goods is as follows:-
Facility is disbursed in specially opened CF A/C for the purpose
It shall be ensured that Goods tendered for pledge are:-
- Free from credit restrictions imposed by State Bank of Pakistan
Not perishable, do not require special Storing arrangements / conditions and have short expiry period.
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Easily marketable and their price is not highly fluctuating.
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If so higher margins shall have to be approved & retained
Where variation in pricing is observed during periodic evaluation, the customer shall be advised to make good the shortfall in the drawing power.
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Where variation in pricing is observed during periodic evaluation, the customer shall be advised to make good the shortfall in the D.P.
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The borrowers hold an absolute un-encumbered title to the goods