Cotton pledged with banks: APTMA flags lack of interim benchmark rate

The All Pakistan Textile Mills Association (APTMA) has raised concerns over the absence of an interim benchmark rate for cotton pledged with banks following the closure of the Karachi Cotton Association (KCA) office. In a letter to the Governor of the State Bank of Pakistan (SBP), the association identified a discrepancy between the benchmark rate used by banks and the prevailing market price of cotton and the SBP’s intervention to ensure that textile mills can secure pledge fiancé based on realistic market rates. As per prevailing banking practice, commercial banks use KCA rates as the benchmark for credit against pledged cotton. However, since the KCA office has not issued rate sheets after December 12, 2025, due to the closure of its operations, banks are using the last available KCA rate for valuation.