State banks refuse to release funds to Paddy Marketing Board

Purchasing of paddy will be suspended from next week since the two main state banks, the Bank of Ceylon and the People’s Bank, have refused to release funds to the Paddy Marketing Board, it was reported. 

Meanwhile, “Aruna” Newspaper reported that large-scale rice mill owners are preparing to drastically reduce the prices of rice next week.

Despite the Cabinet giving approval to the Paddy Marketing Board to obtain a loan of Rs.1 billion each from the two state banks for the purchase of paddy, the two banks have refused to release funds.  

The banks have informed that an assurance is required from the Central Bank to provide a loan amount of Rs.2 billion to the board.

However, it is said that the Central Bank has issued assurances to many government institutions in connection with obtaining financial loans, and therefore, the Paddy Marketing Board cannot be issued an assurance.

In addition to this, reports said that these two banks are facing a shortage of funds as a result of arbitrarily lending money to businesspersons in the past.

The Ministry of Agriculture has asked the two banks to keep the stock of 30,000 metric tons of paddy purchased by the Paddy Marketing Board this year as collateral, but the banks have refused to this request as well.

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