LAHORE, April 16: The Punjab is expected to obtain credit from commercial banks for its wheat procurement operations this year at less than six per cent interest rate.

The Punjab food department officials told Dawn here on Wednesday that the commercial banks had already agreed to provide the province the credit needed for wheat procurement at six per cent. However, the government was trying to convince the banks to further reduce their interest rate to 5.5 per cent — the rate at which they are reported to have agreed to give the credit to Sindh for the same purpose.

“If one province can get credit at a lower rate, why shouldn’t the other be given the same by the same banks for the same purpose?” they said.

They said the banks had initially offered the Punjab loans for wheat procurement at 9.5 per cent interest rate as against 12 per cent charged by them last year. However, they added, the province had convinced them to bring down the rate to six per cent.

But it was pointed out by some officials at a recent meeting on wheat procurement chaired by the chief minister that the province should ask the banks to provide the loans at the same rate they had agreed with Sindh. They said the banks had agreed to bring down their interest rates because of the very low demand of credit by the private sector. — Staff Reporter