Punjab food procurement agencies have asked banks in the state to seek No Objection Certificate (NOC) while making advances to rice shellers or millers to curb financial fraud.
This comes in the backdrop of two financial frauds emerging in the state wherein unscrupulous borrowers managed to get finance against the foodgrain stock, which belonged to state procurement agencies.
In a representation given by Punjab's cooperative Markfed, bankers have been asked to obtain NOC from foodgrain procurement agencies while making advance against collateral of food grains.
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"Many banks are not taking NOC from the concerned food procurement agency as they have come across two frauds wherein unscrupulous borrowers have been able to get finance against that stock belonging to state procurement agencies," it has said.
The matter came up during the 131st State Level Banker's Committee (SLBC) meet, which was held here today.
It was informed that banks should obtain stock figures of paddy held for milling from the concerned district food and supply controller of Punjab along with NOC from the department of food and civil supplies while lending to rice shellers or millers.
It was resolved that banks would reiterate the instructions of obtaining NOC from the district food and supply controller of the district and convener bank will make a reference to the department of food and civil supplies for issuing instructions to the DFSCs (District Food & Supplies Controllers) for issuing of NOC immediately.
Notably, in the 127th meeting of SLBC, it was decided that while financing of shellers/millers, only stock figures of paddy millers be hypothecated.
