KARACHI, June 9: The State Bank of Pakistan on Friday imposed a 50 per cent cash margin requirement on all fresh advances/disbursements by banks against the sugar stocks to discourage hoarding of sugar and to ensure its price stability.

According to BPD circular No. 4, the SBP had also prohibited the banks from financing the cash margin requirement themselves and directed the banks to fully adjust all previous advances against the security of sugar stocks latest by July 31, 2006.

The central bank also asked the banks to ensure that renewals/fresh disbursements of such advances were made only after a clean up period of at least one month with a 50pc cash margin requirement.

The banks had further been directed to report all such advances to the SBP on fortnightly basis as per prescribed format.—APP