KARACHI - State Bank of Pakistan has rejected the impression created by certain quarters that the recent decision of the State Bank of Pakistan to restrict bank financing to functional flour mills only may deprive the farmers in getting appropriate price for their wheat. This impression is totally unfounded, a statement issued by SBP on Thursday said. In order to dispel this impression, it is clarified that the procurement of wheat is largely made by Pakistan Agricultural Storage and Supplies Corporation (PASSCO), and food departments of the Governments of Punjab and Sindh. Although the private sector has been allowed to participate in procurement of wheat, its role is still evolving and needs to be closely monitored to prevent a repetition of the wheat hoarding crisis that started during 2007. In order to discourage hoarding of wheat, the banks have been directed by the State Bank to provide financing to functional flour mills only for procurement of wheat during wheat procurement season 2008. It may be added here that extensive consultations were held with the Ministry of Food, Agriculture and Livestock (MINFAL) and input was also taken from different references received from Pakistan Flour Mills Association on the adverse role of the non-genuine buyers of the wheat during wheat procurement season 2007. The facilities to the private sector are in addition to the bank financing made / to be made available for the procurement drive of the government agencies and provincial food departments, who have been allowed by the government to avail bank financing to the extent of Rs 87 billion for the current year. The State Bank will continue to monitor the performance of banks in providing funding facilities to the private sector as per its instructions and ensure that the financing requests of eligible borrowers for procurement of wheat are not denied on flimsy grounds. SBP has been highly supportive of commodity financing requirements of the country and has played a significant role in encouraging banks to provide timely credit to farmers and mills.