Going by the new policy that the central bank issued to the banks on the day, the lending banks now need not to issue margin calls even if the market prices of the collaterals-pledged shares decline up to 10 percent of its value.[break]
So far, borrowers used to receive the margin calls, seeking them to pay differences between collateral´s worth and loans amount, as soon as the price dipped, irrespective of the extent of drop.
The central bank has also relaxed policy on the renewal of margin type lending.
Under the new amendment, the central bank has allowed the lending banks to renew margin type lending of up to 75 percent in case the borrowers have repaid at least 25 percent of their loans and cleared all liabilities, including interests.
Now onwards, the borrowers, who paid back at least 25 percent of the outstanding loans liability, can now renew their loans with the banks. Previously, they were required to pay back at least 50 percent of the loan liability to get the loans renewed.
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