LARKANA, Sept 4: The president, Sindh-Balochistan Rice Millers and Traders Association said that banks were charging 15 to 17 per cent mark-up on paddy loans, while mark-up on export financing, car financing, wheat, and cotton ginning ranged from 3.5 to 11 per cent.

It was quite unjustified and excessively charged mark-up on paddy, he said in a letter to the governor of the State Bank of Pakistan.

Talking to this correspondent on Thursday, Mr Mahesar said that the issue was raised with the presidents of different banks but in vain and finally he wrote to the governor of the SBP for providing justice.

Also the chairman, Pakistan Rice Board, was approached and apprised of the situation, which responding to the association’s correspondence moved the matter to the governor of the SBP, he said.

The association spokesman, Mir Mohammed Shaikh, told this correspondent that 2.4 million tons of rice were produced annually in Sindh and Balochistan and after meeting the domestic requirements around 1.2 million tons of rice were exported, fetching more than $200 million every year.

Qasim Nawaz, the joint director, banking police department of the SBP, replying to a letter of the association said that the matter of excessive charging was investigated with five big banks. The banks had informed the SBP that they were extending financing facilities to the rice millers for the purpose of BMR (breakage, maintenance and repair) of the existing mills, procurement of paddy and construction of godowns at the mark-up rate of 10.2 to 12.4 per cent as against 15 to 17 per cent mentioned by the SBRMTA.

He said that the SBP would appreciate it if the association would provide details in case of specific cases where banks had charged excessively high mark-up from low-risk borrowers so that it could be taken up with the banks concerned on the basis of merit.

The association asked its members to provide details of excessive mark-up they had paid on bank loans on paddy during 2002-2003 so that claims of refund could be sent to the SBP.

So far 21 members of the association from different cities have sent certificates of the banks concerned for excessive charging of mark-up on paddy loans that ranged up to 16.79 per cent, said the spokesman of association, Mir Mohammed Shaikh.

He said that members of the association who had obtained loans from different banks had also provided photocopies of the loaning facilities coupled with the excessive mark-up the banks had charged from them during the year 2002-2003. Such cases had been forwarded to the SBP section concerned with a separate letter for every single case with the request to take up the matter with the bank concerned for refunding the excessive mark-up charged from the borrowers (the members of association) during the year under reference, Shaikh said.

He said that the joint director of the SBP was also informed regarding the dispatch of cases and more cases would be sent to the SBP as many members of the association phoned this office for sending cases.