| Our Commodities Bureau
The Punjab National Bank (PNB), a stake-holder of the National Multi-Commodity Exchange is set to launch a warehouse receipt (WR) based finance scheme for the farming and trading community.
According to sources, some of the identified PNB branches will sanction demand loans to a farmer or trader when they present a WR from the Central Warehousing Corporation (CWC).
This would cover the risk of the quantity and quality of the commodity, credit risk of the custodian, accompanied with a forward sale contract of the NMCE. The price risk also stands covered according to the scheme.
A loan amounting to 75 per cent of the value of a non-perishable agricultural commodity will be given under the scheme.
At present, roughly over 1000 farmers trade in agricultural commodities, especially pepper and rubber trade on the NMCE. The exchange expects the number to increase considerably with the introduction of the loan scheme. The loan can be availed of by farmers and traders through the members.
In order to provide more transparency in the trading, the NMCE is also planning to introduce the T+7 trading delivery system in its pepper and rubber contract across its terminals.
It will commence in six months time and will ensure the participation of genuine players in the market. At present there are over 530 NMCE terminals across the country.
The exchange will also subsequently launch T+3 and T+2 delivery systems.
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