FAQ’s

FAQ's

Warehouse Operators
1. What is your accreditation process?
A Warehouse Operator desirous to get his warehouse accredited with NCMCL, will approach NCMCL wherein NCMCL’s Sales and Marketing personnel will coordinate with the potential customer (Warehouse Operator) about the basic documentation and other requirements.

After completion of documentation process the Sales and Marketing personnel will get the Application Form signed for the customer.

The completed file together with accreditation fee will be submitted at NCMCL head office for review. Any discrepancies in the documents will be highlighted and specifically marked and get resolved.

Once the documentation process is completed, NCMCL will appoint an assayer to inspect the warehouse in line with the accreditation criteria. The assayer will submit its inspection report with the actual findings.

If the storage facility meets the required criteria, an Accreditation Certificate will be issued to the warehouse or otherwise the customer will be informed of corrective measures to be taken and a follow-up visit will be agreed.

NCMCL will deploy its EWR System at the accredited warehouse and also provide EWR System’s training to the relevant personnel.

The warehouse can now accept produce deposits from the depositors and issue EWRs.
2. What kind of facility should I have for accreditation?
NCMCL will accredit both types of storage facilities i.e. traditional warehouse (floor-type godown/warehouse) and steel/concrete silos which meet NCMCL accreditation criteria.
3. Do I have to improve the capacity of my staff or get staff with specific qualifications?
A Warehouse Operator should have staff having adequate experience of handling agri-commodities with computer literacy.
4. What location is suitable for a facility?
Location of a storage facility is a commercial decision to be taken by the Warehouse Operator based on cropping patterns in the area, accessibility to main road/rail networks, proximity to local grain mandis and processing facilities etc.
5. What crops will you work in?
To start off with, Maize and Rice will be catered to in phase 1. The operations will be scaled up gradually to broaden the scope and include other crops like oil seeds, wheat and other agricultural produce.
6. What are the charges for accreditation?
Accreditation charges depend on capacity of the storage facility. Please contact NCMCL for complete details.
7. What are additional costs I have to bear for accreditation?
  1. Insurance (for produce Fire and Allied Perils insurance + for personnel Fraud and Indemnity insurance)
  2. Bank guarantee/Performance Bond
  3. Security Deposit
Please contact NCMCL for complete details.
8. How would I make money? Commercial model
The primary source of revenue for a warehouse will be rental income for the produce stored. This rental will include monthly storage fee, quality and quantity verification/maintenance, issuance of EWR, pre-cleaning, routine fumigation, insurance of deposited produce and inward labour handling charges. Additionally, other ancillary services i.e. drying, additional cleaning/processing and packaging may be charged separately to the depositor.
9. What do I have to pay to Naymat Collateral and on what terms/frequency?
One time Accreditation fee, annual accreditation renewal fee, audit fees. Please contact NCMCL for complete details.
10. How am I covered against losses and liabilities?
A Warehouse Operator shall obtain appropriate insurance covers for losses and liabilities i.e. for stocks Fire and Allied Perils insurance, for its own staff, Professional Indemnity and Fraud Insurance, as specified in the Accreditation Agreement.
11. How would cases of fraud/dispute be resolved?
Through NCMCL dispute resolution mechanism. Please contact NCMCL for complete details.
12. How can my staff be trained?
Warehouse Operator shall have experienced staff with adequate experience of working in grain industry for daily operations. The warehouse Operator may also take the services of relevant service providers, as they deem appropriate for building capacity of their employees. NCMCL will arrange specific training programs for accredited warehouses to build staff capacity for EWR System usage. Additionally from to time NCMCL may arrange training of relevant warehouse personnel in produce testing and other operational needs.
13. Do I need to own the warehouse or is rental/lease fine?
A Warehouse Operator may rent/lease a facility, however, storage rental agreement need to be for a period of at least XX years and must submit a registered lease/sub lease deed. A landlord waiver will also be required in case of a rented warehouse. Please contact NCMCL for complete details.
14. Do I need any regulatory approvals?
Some local approvals may be required. Please consult with your local lawyers in this regard.
15. What will happen if there is a loss of quality or quantity of produce during storage?
This is one of the primary responsibility of the Warehouse Operator. In case of any quality or quantity loss during storage, the Warehouse Operator is liable to compensate the depositor/EWR holder. The Warehouse Operator is required to take utmost care upon receipt of produce at intake to ensure no substandard quality is received and ensure regular monitoring and safe keeping of the same.
16. If I increase storage capacity, do I have to pay extra to Naymat?
The charges are based on storage capacity slabs. Please contact NCMCL for complete details.
17. If I have storage in multiple locations, will they be covered under a single accreditation or multiple?
Each storage facility will be inspected individually and Certificate of Accreditation will be issued for each individual storage facility.
18. Can I issue an EWR against my own stock?
No. This is not allowed under the accreditation rules.
19. Can I do some other business from my accredited warehouse premises (e.g., trading, drying, threshing, etc.)?
Yes, other ancillary services may be provided.
20. Can I give a pledge in favor of banks on my other stock but within my premises?
Warehouse Operator’s own stocks can be pledged to a bank provided they are stored separately from the other depositors’ stocks.
21. How do I determine the rental to be charged to the Depositor/Holder? What services are included in the rental charge?
Rentals may be charged based on mutual agreement of the Warehouse Operator and depositor. However, these charges have to be conveyed to NCMCL and fed in the EWR System accordingly.Rental charges include Monthly storage fee, quality and quantity verification/maintenance, issuance of EWR, pre-cleaning, routine fumigation, insurance of deposited produce and inward labour handling charges. Additionally, other ancillary services i.e. drying, additional cleaning/processing and packaging may be charged separately to the depositor.
22. Can the rental charge differ from depositor to depositor and produce to produce?
Yes. This will be a totally commercial decision to be taken by the Warehouse Operator based on mutual agreement.
23. What taxes are applicable to the provision of warehousing services?
Please refer to the relevant tax laws in this regard. For details, please consult with your tax consultant.
24. How will I issue EWRs?
EWRs will be issued through the EWR System deployed by NCMCL at the accredited warehouse. Details of all commodities received in the storage facility will be entered in the EWR System and subsequently an EWR will be issued through the System. Please contact NCMCL for complete details.
Commercial Banks & Other Financial Institutions
1. How would a Depositor approach the bank? How would the bank know if someone is interested to get financing against an EWR?
Linkage with the participating banks may be made through the Warehouse Operator, the Brokers at Pakistan Mercantile Exchange, the local branches of banks in the vicinity and information available on the NCMCL website. Banks may also approach EWR holders through the EWR System.
2. What is the responsibility/role of NCMCL and warehouse operator?
Please refer to the relevant CMC Regulations and relevant documentation/agreements executed in this regard.Under the CMC Regulations 2019, NCMCL has been licensed for accreditation of warehouses based on international best practices. The accreditation process is to be carried out strictly in compliance with the regulations and Standard Operating Procedures (SOPs) to ensure that quality of produce stored is maintained throughout the storage period and the Warehouse Operator has requisite security and vigilance infrastructure in place. NCMCL will have a system in place whereby frequent snap checks are regular audits of the accredited facilities are carried out to ensure strict compliance with the SOPs and CMC regulations.The Warehouse Operator will carry out testing for the purpose of grading the produce. All of the details will be captured in the EWR system, which will issue the EWR as a title to the produce stored. The Warehouse Operator will be responsible to maintain the quality and security of the produce.
3. How would the collateral be secured?
The banks have an option of taking the EWR under its pledge or transferring the same to their account and become the holder. In both cases the EWR will be blocked for any further movement, until the relevant bank allows the same. Please refer to CMC Regulations for further details.
4. What is the process of issuing EWRs?
Any depositor including farmer, trader or processor interested in storing the produce in an accredited warehouse will approach the same. The Warehouse Operator will open the account in the EWR system in line with the documentation requirement and the criteria laid down by NCMCL.  The Warehouse Operator will carry out testing for the purpose of grading the produce. Relevant details will be captured in the EWR system, which will issue the EWR as a title to the produce stored. The Warehouse Operator will be responsible to maintain the quality and security of the produce.
5. What kind of access would the banks have on the system?
All the participating banks will be provided with the relevant administrator authorities, viewing authorities, financial authorities, as required.
6. What kind of access would the banks have to the warehouse operator’s facility?
The banks would have access to warehouses where the produce financed under EWR regime is stored. They may carry out on site reconciliation of actual stock being maintained with the stock register/records. Banks can also check and validate adequacy of security arrangements, as agreed by the Warehouse Operator in line with the SOPs.
7. What are the key features of the accreditation criteria that ensure security of collateral?
A detailed criteria to ensure security of the collateral has been designed, which the Warehouse Operator is required to adhere to. The Warehousing Guidelines, SOPs and Accreditation agreement will ensure strict compliance with this criteria. Following are the high level measures:Construction of the warehouse as per Guidelines Testing and grading of the produce Quality and quantity maintenance during storage period Security and monitoring measures Following laid down procedures Accessibility to relevant stakeholders Arranging relevant insurance, financial guarantee /performance bond/security deposit.
8. What are the risks (credit and operational) and how are those mitigated by the regime?
EventDescription and Associated RiskMitigation Strategy
ConnivanceConnivance between the Warehouse Operator & Accreditation team leading to concealment of factual position and compromising on accreditation standards• Detailed SOPs developed with standards for accreditation.
• Clear segregation of roles of front end & verification staff.
• Geo mapping & photographic evidence collection.
• Warehouse Operator Agreement clearly stipulates rights, duties & obligations.
• Monitoring via onsite inspections & spot checks.
Fraudulent Issuance of EWRIssuance of EWR by the Warehouse Operator without any goods in possession• Phased roll out. Soft launch with Warehouse Operators having impeccable market reputation. Scale up based on learning from the soft launch
• EWR to handle issuance process with four eye principle
• Verification of depositors via biometric check & other verifications including Verysis check
• Digital record maintenance & information sharing via API
• Fidelity Insurance Cover
• Bank guarantee to be provided by the Warehouse Operator
• Monitoring of activities with the help of CCTV’s and other digital tools
Erroneous Reporting on EWRConsidering the low literacy levels. Warehouse Operator may issue the depositor with an EWR by under reporting quantity and mis-reporting grades and prices. Leading to lower valuation• EWR to be issued only electronically
• Issuer to share the copy (not valid for trade, transferability or pledge) to depositor & maintain/upload acknowledgement
• Terms and conditions on EWR to be provided in Urdu along with acknowledgement by the depositor of same via thumb impression or signatures
• Depositor to receive EWR details via cell phone

Comingling of various grades of the same productThe Warehouse Operator may mix different grades of the same produce effecting bank margins in case of default or may cause loss to the depositor• Grade testing report to be placed in records of the depositors and uploaded on NCMCL EWR System and captured on the EWR as well
• Monitoring by NCMCL via spot checks (reconciliation of stocks) & onsite audits
• Fidelity insurance cover (covering a percentage of value)
Theft, Fire, terrorism or any other natural calamity damaging the warehouse and the stored goodsLoss of product/collateral• Comprehensive insurance cover for the products stored under the NCMCL program at the warehouse
9. What are the details on pricing/revenue sharing?
The banks are encouraged to develop product programs for financing under the EWR regime. Considering the fact that the regime will be governed under stringent standards of accreditation of warehouses, majority of the operational risks involved in conventional “muqadam” based financing will be mitigated. Given this banks are expected to offer competitive risk based pricing to the depositors. The banks can offer both, fixed or floating rates under the program. All the partner banks will be obliged to share 0.5% per annum of the amount financed with NCMCL.
10. In case of default, what will be the process for foreclosure and role of NCMCL and Warehouse Operator in it?
In case of default, the bank will be authorized to acquire produce stored against a particular EWR by serving requisite notices to the depositor as per law. On the completion of due legal process bank will have the right to sell the EWR or get the produce released for selling it in the local ghalla mandis (Grain Market). Please contact NCMCL for complete details.
11. Which crops will be part of the program?
To start off with, Maize and Rice will be catered to in phase 1. The operations will be scaled up gradually to broaden the scope and include other crops like oil seeds, wheat and other agricultural Produce.
12. What will be the tenor of loans against EWRs?
This would be more of cash financing for the short term. Generally, loans would not exceed six months in tenor
13. What are the security features of the system which protect the rights of EWR holders over produce through EWR?
The main difference is the fact that the warehouse receipt will be in electronic form as compared to conventional paper based ones, which run the risk of being counterfeited. The depository of these EWRs will be the IT system managed by NCMCL in a secured environment. All transfers and withdrawals at the Warehouse Operator’s end will be subject to layers of authentication and validation. Similarly, any lien marking and removal can only be done by the relevant bank after carrying out the due process on the EWR system.
14. How will we ensure that a pledged EWR is not sold through irregularity/fraud?
The main difference is the fact that the warehouse receipt will be in electronic form as compared to conventional paper based ones, which run the risk of being counterfeited. The depository of these EWRs will be the IT system managed by NCMCL in a secured environment. All transfers and withdrawals at the Warehouse Operator’s end will be subject to layers of authentication and validation. The pledged EWR will be blocked in the System and will not be available for sale.
15. Is the insurance taken by the Warehouse Operator or CMC? Is the bank co-assured under the insurance? What risks are covered and to what extent? What is the process for claim payment to the bank?
The EWR Holder will be co-assured. The commodities stored in the warehouse will be insured against theft, fire, natural disasters and terrorism, etc by the Warehouse Operator. Meaning thereby that the collateral will be secured and the claim process against any untoward incident will be initiated by the Warehouse Operator. Once the insurance claim is processed by the Insurance Company, bank and depositor will be compensated accordingly. In case of the pledged EWR, banks holding a lien will receive the claim amount which will reimburse balance to the depositor after deduction of outstanding principal and accrued mark-up.  In addition to this Warehouse Operator will also be required to take Fidelity Insurance, which will provide an extra coverage of risk, up to a certain extent, against fraud.
16. How would the bank recover its principal and mark-up? What will the payment process be?
Any EWR which has been financed will be lien marked in the EWR system by the bank. The lien marking process will ensure that this particular EWR can neither be sold nor the goods can be released against it without the authorization/removal of lien by the bank in the EWR system. If the depositor intends to either sell the EWR or wants the stored produce released, it will only be done after settlement of outstanding principal and mark-up by the depositor to the satisfaction of the bank.
17. How do EWRs fit into Islamic banking?
Islamic banking tends to create link with the real sectors of the economic system by using trade related activities. Since, the money is linked with the real assets Islamic finance, therefore EWR regime provides an ideal vehicle for Islamic mode of financing where money is actually used as a medium of transaction and not a produce. Murabaha agreements can be structured to fund clients against EWRs. It involves a request by the client to the bank to purchase certain goods. The bank does that for a definite profit over the cost, which is stipulated in advance
Depositors & EWR Holders
1. What do I have to do to start depositing produce with an accredited warehouse?
A depositor needs to get registered with NCMCL prior to depositing the produce and also sign storage agreement with the warehouse. Once the documentation is completed, the depositors can bring their produce into the accredited warehouse where the produce will be tested/graded, weighed and offloaded into the warehouse and subsequently an EWR will be issued to the depositor. 
2. What is the minimum volume to get an EWR issued?
Minimum recommended quantity is set to 10 metric tons for issuance of an EWR.”
3. What documentation do I have to submit (and to Warehouse Operator) to participate in regime?
For IndividualsCopy of Computerized National Identity Card of the applicant. Copy of Computerized National Identity Cards of Nominee (if applicable) Copy of passport of the applicant, or Nominee(s) (in case of non-residents) Copy of Income tax return (if applicable) Copy of land document (if applicable)For CompaniesAttested copies of Memorandum and Articles of Association Certificate of Incorporation. Partnership deed (registered/unregistered) Board of Directors’ Resolution (for incorporated companies). List of Authorized Directors/Officers, Warehouse Operator would operate the Account with attested copies of their CNICs. For Sole Proprietorship account, an Account Opening Request on Business Letterhead 
4. What charges do I have to pay and what is covered in them?
Monthly storage fee which includes quality and quantity verification, issuance of EWR, pre-cleaning, insurance of deposited produce, routine fumigation and inward labour handling charges. Please contact NCMCL for complete details.Note: additionally, any other ancillary services i.e. drying, additional cleaning/processing and packaging may be charged separately by the warehouse. 
5. How do I get a loan against my EWR? At what interest rate/mark-up?
An EWR holder will approach local designated branch of the participating bank, warehouse operators and NCMCL and participating bank’s website. The depositor may request the bank to extend financing against the EWR in his name, details already in the EWE System to the bank. The bank will complete its internal documentation and will extend financing as per its laid down criteria. Interest/mark-up will be charged by each bank as per its policy. 
6. What happens if there is a difference between what I deposited and what the warehouse operator is returning to me at the time of withdrawal?
A Warehouse Operator being the custodian of the produce, is liable to return the same grade and quantity to the depositor/Holder as stated on the EWR. In the event of difference in quality or quantity, Warehouse Operator is liable to compensate the depositor. In case of any unresolved dispute, NCMCL may be contacted. 
7. Can I have my deposit to be stored separately and the same to be given to me at the time of withdrawal?
This depends on the agreement with the Warehouse Operator and availability of separate storage space at the warehouse. In silo storage, produce of same grade/same variety will be stored in comingled form.
8. What happens if my lot gets rejected at the storage facility?
Warehouse will only accept those lots which conform to the laid down standards. Any rejected lot will be taken back by the depositor at his cost.
9. How do I sell my EWR?
A prospective buyer should get his account opened with NCMCL. This can be facilitated by the Warehouse Operator, PMEX Broker or a bank.An EWR holder has two options to sell his EWR as follows:Off exchange sale (local market). The EWR holder may sell his EWR to a buyer in the local market. The Holder can initiate the transaction through the EWR System and after due verification, the EWR can be transferred to the buyer. However, warehouse related charges must be settled prior to transfer of EWR title to the buyer. At Pakistan Mercantile Exchange: The EWR holder may also sell his EWR to a buyer at PMEX as per PMEX SOPs. 
10. Can I sell my EWR without physically going to the warehouse?
Yes, an EWR Holder can initiate the sale transaction without visiting the warehouse through logging into the EWR System using his login ID and password. However, all charges to-date have to be settled prior to the transfer to be effected. 
11. Will I get paper evidence of my ownership of my EWR?
EWR will be issued only in electronic form, however, a copy may be obtained from the warehouse which will not be valid for any financing or transfer of title purposes. 
12. What happens if the warehouse operator refuses to return my lot as per my request?
The EWR holder may lodge a written complaint to the warehouse Operator under intimation to NCMCL giving full details of the EWR. 
13. What happens to my EWR if the warehouse is damaged/destroyed for any reason?
In case of damage/destruction of a warehouse, the Holder will be compensated through the insurance obtained by the Warehouse Operator. 
14. Can I sell an EWR which has been pledged to a bank?
A pledged EWR can only be sold subject to clearance of the bank. In this case the loan (principal and mark-up) will be settled first. Only after loan settlement, the bank will issue release order for the produce which can then be withdrawn physically from the warehouse. 
15. How can I buy an EWR?
A prospective buyer should get his account opened with NCMCL. This can be facilitated by the Warehouse Operator, PMEX Broker or a bank.A buyer has two options to purchase EWR:Off exchange sale (local market). The EWR holder may sell his EWR to a buyer in the local market. The Holder can initiate the transaction through the EWR System and after due verification, the EWR can be transferred to the buyer. However, warehouse related charges must be settled prior to transfer of EWR title to the buyer.At Pakistan Mercantile Exchange: The EWR holder may also sell his EWR to a buyer at PMEX as per PMEX SOPs. 
16. If I buy an EWR, do I have to pay the entire rental charge owed on it? Who will calculate the rental charge I have to pay?
It depends on the agreement between the seller and buyer. However, the transaction can only be effected after settling the due rentals and other charges of the warehouse.The rentals and other costs will be calculated through the EWR System. 
17. What documentation do I need for opening an account at PMEX to trade?
Please visit https://www.pmex.com.pk/client-trader/ for complete details regarding account opening process at PMEX. 
18. Do I sell a Whole EWR or can I split my EWR and sell a portion of it?
EWRs can be sold in full quantity and/or can also be split to sell the produce partially.
19. How can I see which EWRs I have in which accredited warehouse?
EWR holder can login into the EWR System through his User ID and Password and can access the relevant EWRs details.
General
1. What is the process of account opening with Naymat?
Account opening process can be accessed via following link: *www.naymatcollateral.com/videos and brochure available at Naymat’s website under RESOURCE CENTER > FORMS AND DOWNLOADS
2. What documents are required for account opening with Naymat?
Please see page 5 for required documents in Account Opening Form under “Enclosures”
3. How long will it take to open my account with Naymat?
It takes 24-48 hours subject receipt of all required information.
4. What is the EWR issuance process?
EWR issuance process can be viewed via following link: *www.naymatcollateral.com/video and brochure available at Naymat’s website under RESOURCE CENTER > FORMS AND DOWNLOADS
5. How do I know that EWR is correctly issued for the specific quality I deposited into the warehouse?
The Depositor/Holder through his portal can login into EWR System and verify the contents of the EWR. In addition, the Depositor/Holder will be provided with Information Copy of EWR. The Information Copy includes all relevant details of the Produce i.e. Quality/Grade, Quantity, Weight, Location etc.
6. Will I receive any notification about the EWRs on my mobile or email ID?
Yes. EWR System generates notifications via SMS and emails for any transaction done on EWR including issuance, splitting of EWRs, transfer, pledge, and withdrawal.
7. Do I need and keep the paper evidence of my EWR as ownership document?
No. The paper evidence of ownership is not required under the EWR regime, as the ownership is transferred digitally into the Depositor/Holder’s account maintained in EWR System.
8. Where can I see my EWR details and storage rentals in EWR System?
Immediately after issuance of EWR. Depositors/Holders can login into their account in the EWR System to view their EWRs details and associated storage rentals.
9. Can I split my EWR and sell a portion of it?
Yes, if it is NOT under lien by a bank. Depositor/Holder can split his EWR by logging into his account or requesting the Warehouse Operator to split the EWR on his behalf. Post authentication via OTP, EWR will be split into the required quantities. Subsequently the Depositor/Holder can sell the split EWR.
10. How will I request financing against my EWR through Naymat’s EWR System?
Following is the process: • Select the EWR against which financing is required • Post authentication via OTP, the request will be moved for Warehouse Operator’s acknowledgement in the EWR System. • Once the Warehouse Operator acknowledges, the request will be moved for bank’s approval in the EWR System. • Bank’s designated staff will login into bank’s designated portal in the EWR System and approve the transaction subject to meeting all requisite information.
11. Can I sell/transfer my EWR without physically going to the warehouse?
Yes. An EWR Holder can initiate the sale transaction without visiting the warehouse through logging into the EWR System using his login ID and password or requesting the Warehouse Operator on his behalf after due authentication via OTP. However, all storage related charges to-date have to be settled prior to the sale/transfer to be effected.
12. How can I withdraw my EWR and underlying commodity from the warehouse?
An EWR Holder can initiate the withdrawal transaction through logging into the EWR System using his login ID and password or through the Warehouse Operator on his behalf after due authentication via OTP. However, all storage related charges to-date have to be settled prior to physical withdrawal of the commodity from the warehouse.
13. How can I transfer my EWR to a buyer?
An EWR Holder can initiate the transfer transaction by logging into the EWR System using his login ID and password or requesting the warehouse Operator. Post authentication via OTP, the EWR can be transferred to an existing account Holder in the EWR System. All storage related charges to-date have to be settled prior to the transfer to be effected.
14. Can I sell/transfer an EWR which has been pledged to a bank?
No. EWR cannot be sold and/or transferred to any buyer prior settlement of bank loan.
15. How can I see my storage rentals and other charges in the EWR System?
All storage rentals and other charges can be viewed under “Charges” menu in EWR System.