1

Quick Success Series Remittance & Collection

QUICK SUCCESS SERIES was envisioned by Sri Shailesh Kumar, who was then a Faculty at SBLC Deoghar and he along with Sri Rajeev Shankar (who is still in our team) converted their dream into reality, they did not really knew that time that QSS will become so popular and SBLC Deoghar will receive overwhelming demand for its updated version year after year from various parts of the country. A special thanks to both of them for conceiving QSS. One of the hall marks of excellence is that any product remains constantly in demand and over years, the demand grows. Team Deoghar is humbled by the response and recognition, it has received from various users of QSS. Our sincere thanks to our readers. Your expectations will keep us live and kicking. I take pride in representing a Team comprising of Sri Akhil Kumar Mishra, Chief Manager (Training), Sri Shiv Prakash Jha, Chief Manager (Training), Sri Rajeev Shankar, Chief Manager (Training), Sri Champak Das, Manager (Training) & Sri Rakesh Roshan, Manager (Training), who have owned up QSS like their own baby and are constantly contributing towards value addition and keeping it relevant and up to date for the users. We hope that this edition will be equally useful for various promotional exams. We request our readers to point out any lapses at the earliest, though we have taken adequate care to be as correct as possible. This book is however not a substitute for circular instructions issued by the Bank from time to time. Our Team wishes you grand success in all your endeavours. S K Rana
Assistant General Manager, State Bank Learning Centre, Deoghar- 814112

QUICK SUCCESS SERIES

AGRICULTURE ADVANCES

Phone- 06432-232895 Fax - 06432231810 E-mail: [email protected]

Compiled and updated By

Rajeev Shankar
Chief Manager Training, SBLC Deoghar Mobile-9431143992 Email- [email protected]

Update as on

31st March 2013

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Quick Success Series: Agriculture Advances March 31, 2013

As per RBI guidelines, banks have to achieve the target of priority sector lending at 40% of their Adjusted Net Bank Credit (ANBC), 18 per cent of ANBC should go towards agriculture lending. Of this, indirect lending in excess of 4.5% of ANBC will not be reckoned for computing performance under 18 per cent target. Ground Water Availability: a) White Blocks- exploitation of ground water is less than 70% of the available water. b) Grey Blocks - 70% to 90% of the available water has already been exploited. c) Dark Blocks More than 90% of the available water is already over-exploited. Spacing norms for wells : a) Between two dug wells 180 meters b) Between two dug wells with pump sets 180 meters c) Between two bore wells with pump sets 250 meters d) Between a dug well and a bore well 215 meters Tractor Loan - For tractors up to 35 HP: min land holding is 4 acres, above 35 HP: 6 acres. - The tractor should have 600 hrs of productive work in agriculture. - The Central Farm Machinery Training and Testing Institute (CFMTTI), Budni, M.P issues test certificate for various makes of the tractor. - The maximum repayment period is 9 yrs as the usual life of a tractor is 10,000 hrs. The service charges payable to tractor dealers are paid by debit to interest account. Service Area Approach had been recommended by the Ojha committee in 1989. Now it is applicable to Government sponsored schemes only. The operational area of the branches for financing under schemes other than GSS, should bei) ADBs/DBDs Within a radius of 50 km. ii) Other branches- within a radius of 20 km. The Branches have to submit LBR (Lead Bank Return) LBR 1- Annual statement showing annual target under the plan LBR 2- Month wise disbursement under the credit plan LBR 3- Half yearly recoveries and outstanding loans LBR U1/U2/U3 are submitted by branches located in urban areas SELF HELP GROUPs: Recommended by Kalia Committee. -A voluntary association of 10-20 persons with common interest to improve their economic and social status. -Finance up to a max of 4 times the savings of SHG.( The branches may consider higher quantum of loans beyond four times of Groups corpus to SHGs availing repeat loans / renewals (up to Rs. 50000/- per SHG member), considering the quality, credit absorption capacity, managerial ability, etc of SHGs as reflected in its rating score.) (ecir- 353 dt 12/07/2012) -The minimum number of members in an SHG may be reduced to 5 in case of difficult areas, disabled persons and minor irrigation schemes. - The finance to Self help Groups is classified as direct agriculture advances as long as bank is able to maintain such segregated data on SHG/ microfinance portfolio. In other cases, finance to SHG is classified under indirect finance to agriculture. - The advances made to NGOs for on-lending to Self Help Groups where all members are undertaking SME activities or majority, say, 90% members are taking up SME activities are to be classified under SME segment. An amount of Rs. 750 per SHG can be given if the NGO is registered and in existence for 3 years for their efforts in formation of SHGs. 50% on formation and opening of S/B A/C, remaining 50% after 3 months from the date of credit linkage. The concept of weaker sections was evolved by Ghosh Committee. A bank will be eligible for unrestricted refinance by NABARD only if the gross NPA to total loans and advances as at previous 31.3 has not exceeded 15%. Small farmer- Land holding up to 2.5 acre of wet land or 5 acres of dry land.

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Marginal farmer- Land holding up to 1.25 acre of wet land or 2.5 acres of dry land. Agricultural labourer- Land holding up to 0.5 acre of land or having a home-stead; should have income of more than 50% by way of agricultural wages. DOCUMENTATION AB-1: Hypothecation Agreement AB-2: Guarantee Deed AB-3: Mortgage Deed AB-4: Revival letter (Borrower) AB-5: Revival letter (guarantor) AB-6: Notice to borrower if loan is not paid on due date. AB-7: Conversion of crop loan into term loan on account of crop failure. It is obtained as an unstamped document signed by both borrower and guarantor. Simplified and uniform documents are obtained now as recommended by RV Gupta Committee (1999). Margin: Crop loans and Term loans- up to Rs 1,00,000/- nil. Above Rs 1,00,000/- 15% to 25%. OMR (rural) can collect cash from borrowers for credit to their accounts up to Rs 20,000/- per visit like BM/FO. The insurance cover for such collections per officer id Rs 100000 per instance. Term loans a) (where moveable assets are created): Up to Rs 1 lac- Primary- Hyp. of assets. Collateral- Nil. Above Rs 1 lac- Primary- Hyp. of assets. CollateralMortgage of land. b) (Where movable assets are not created e.g. Dug well, development of land etc.): Up to Rs 1 lac- Primary - DP note. Collateral nil (Since moveable assets are not created Agreement for Hypothecation -AB1 need not be obtained) c) Above Rs 1 lac- Mortgage of land. INSPECTION: a)Only crop loans: Twice for each crop. b)Only tem loan: 4 times a year. c)Both crop loans & term loans Limits up to Rs 25000: 4 times a year Limit above Rs 25000: 12 times a year INSPECTION CHARGES: a)Up to Rs 25000 (and for SGSY/DIR): Nil b)Above Rs 25000 and Rs 200000: Rs 500 p.a. c)Over Rs 200000 and up to Rs 5 cr: Rs 500 per lac p.a within same municipal limits with a maximum of Rs 10000. For outstation inspection, actual charge + 25% subject to minimum of Rs 10000 p.a. d)Over Rs 5 cr: Actual charge + 25% subject to minimum of Rs 10000 p.a. Credit rating need be done only for advances exceeding Rs 25 lakhs. No dues certificate has been waived by RBI for small loans up to Rs 50000 to small and marginal farmers, only a self declaration to be obtained from the borrower. GREEN CHANNEL PROGRAMME FOR EXCELLENCE (GCPE) This is a special initiative introduced by the Bank in the area of Agri Business during the year 200203 to recognize, motivate and reward, every financial year, those officers who have excelled in Agri Business. AGRICULTURAL TERM LOAN: OBTENTION OF POST DATED CHEQUES (PDCs) Post-dated cheques should be obtained for Agricultural Term Loans and Government Sponsored Schemes loan sanctioned beyond Rs. 2.00 lacs under Agricultural Term Loans. Atleast

SECURITY NORMS:
Crop Loans (ACC / KCC) a) Up to Rs.1 lac: Primary: Hypothecation of standing crops. Collateral Nil. b) Above Rs 1 lac: Primary: Hypothecation of standing crops. Collateral : Mortgage/Charge over land. (In case of genuine difficulties in creation of mortgage/charge over land, any other appropriate security can be obtained. Suitable third party guarantee can also be obtained, with prior permission of controlling authority, in such instances). c) Up to Rs 2 lac : ( having legal ownership of agricultural land with good repayment track record for last 3 years. And those not covered under ADWDRS 2008): Primary: Hypothecation of standing crops. Collateral Nil. d) KCC under contract farming: Up to Rs 3,00,000: Primary- Hypothecation of standing crops. Collateral Nil.

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20 cheques or cheques covering the full / remaining repayment period, whichever is less, should be obtained at the time of sanction of loan. year will be about 150% of the first year limit allowed to farmers). B. Marginal farmers: A flexible limit of Rs. 10,000 to Rs. 50,000 be provided as Flexi KCC based on crops grown including post harvest, warehouse storage related credit needs and other farm expenses, consumption needs + small term loan investments like purchase of farm equipment, establishing mini dairy/back-yard poultry without relating to value of land fixed for a period of 5 years. Margin: No separate margin need be insisted for crop loan as the margin is built while fixing SOF. 15-25% investment credit requirement of small value and repayable within a period of 1 year, which can be included in KCC limit. Collateral security : i. Collateral security is waived for a. KCC limit of up to Rs.1 lac b. KCC limit up to Rs.3 lacs for loans with tie-up arrangement for recovery. Repayment : Each withdrawal under short term sub- limit should be allowed to be liquidated in 12 months without the need to bring the debit balance in the account to Zero at any point of time. No withdrawal in the account should remain outstanding for more than 12 months Nature of account : KCC will be in the nature of revolving account. Credit balance in the account will be eligible for interest at savings bank rate. Validity: 5 years, subject to annual review. Processing charges : Processing charges waived for KCC limit up to Rs.3 lacs. Disbursement: KCC borrowers shall be issued an ATM cum Debit card (State Bank Kisan Card), to enable them to withdraw from KCC accounts from ATMs of our SBI group, in addition to the disbursements at branches.

Important Culture: 1)Aquaculture- Shrimp/Prawn farming 2)Apriculture- Mushroom cultivation 3)Apiculture- Bee keeping 4)Floriculture- Flower production 5)Horticulture- vegetable,fruits,flowers 6)Olericulture- Vegetable production 7)Moriculture- Mulberry cultivation 8)Pisciculture- Fish farming 9)Sylviculture- Forest tree cultivation 10)Vermiculture- Rearing of Earthworm 11)Sericulture- Silk Production 12)Tissue Culture- Plant propagation Revolutions: 1)Blue- Fish production 2)Green- Food production 3)Red- Meat production 4)Yellow- Oil seeds production 5)Black- Rubber production 6)Brown- Cocoa production 7)Rainbow- Flower production 8)White- Milk production

PRODUCTS & SCHEMES

KISAN CREDIT CARD (KCC)
(ecir 391 dt 19/07/2012 & 852 dt 22/11/2012) Eligibility: i. All farmers-individuals/Joint borrowers who are owner cultivators; ii. Tenant farmers, Oral lessees and Share Croppers etc; iii. SHGs or Joint Liability Groups of farmers including tenant farmers, share croppers etc. Fixation of limit : A. Other than Marginal farmers: KCC limit (Maximum Permissible Limit) shall be sanctioned based on the short term loan requirements and Investment credit

AGRICULTURAL GOLD LOAN

RBI has also reduced the risk weightage on loans up to Rs. one lac against gold and silver ornaments from 125% to 50%. Objective: To enable farmers to meet their shortterm agricultural credit needs. Eligibility: Any person engaged in agriculture or allied activities as well as persons engaged in activities permitted by RBI to be classified under agriculture. Type of Loan: Agricultural Cash Credit/Over draft. Demand Loan/Term loan.

requirement of small value in the nature of farm implements/ equipments etc (For every successive years (2nd, 3rd, 4th,and 5th year), the limit will be stepped up @10%.(short term credit limit sanctioned for 5th

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Quick Success Series: Agriculture Advances March 31, 2013

Margin: 30% on price of gold advised by LHO. In deserving cases BM has discretion to reduce to 25% margin. Interest: Interest should be charged as applicable to agricultural advances. Processing Fee: As applicable to Agriculture Advances. Repayment: a. Cash Credit / Overdraft: Like KCC, it is a running account for a period of 3 years, subject to review at annual intervals. b. Demand Loan / Term Loan: the repayment period of the loan should be fixed so as to coincide with the harvesting and marketing season. The total period will not generally exceed one year from the disbursement of the loan in the case of short-term loan / production credit and 36 months in other cases. @Purity of gold can be ascertained by using the following methods. a) Touch stone method b) Nitric Acid method c) Specific gravity method. @ Loans granted against gold & silver ornaments are not to be taken into account for computation of DCB (Demand, Collection & Balance) prepared as on 30th June every year. Collateral: No collateral is required for loans up to the maximum permitted limit of Rs.10 lacs under the scheme. Repayment: Loan has to be repaid within a maximum period of 12 months. Insurance: If value of stock exceeds Rs.15000/-, cover for the full value from approved insurance company. Inspection: 1. Loans up to Rs.25000/- once in two months and for loans above Rs. 25,000/- monthly (if produce is stored at the farmers own house/warehouse). 2. When produce is stored in a

warehouse/cold storage, the Branch Manager will inspect the warehouse(s) every quarter. (ecir- 412 dt. 09.08.2011)
*with effect from 01.04.2012, loans to individual farmers up to 25 lakh against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months, irrespective of whether the farmers were given crop loans for raising the produce or not are classified as direct agriadvance. Produce Marketing Loans, when sanctioned to non-individual entities (as mentioned above), like corporate, partnership firms and institutions engaged in Agriculture and Allied Activities are now classified as indirect agri advance up to Rs 25 lakh. (ecir- 534 dt 03/09/2012)

PRODUCE MARKETING LOAN

Objective: To help farmers avoid distress sale of their produce. To offer the facility of loan against the stocks stored in farm houses, in addition to loan against warehouse receipts. Eligibility: Farmers who have availed crop production loans from the branch or who have availed crop loan from other Bank or who have not availed crop loan from any Bank. Nonindividuals like Partnership firms, Corporate etc engaged in agriculture and allied agri-activities. Sanction limit: 60 to 80% of values of produce depending upon the place of storage, subject to a maximum limit of Rs. 25 lacs. Margin: 40% Security: 1.Loan sanctioned against goods stored in Farmers godown: Primary: Hypothecation of stocks. Collateral: Mortgage / Charge over Land or Third Party guarantee for loans above Rs. 1,00,000/-. 2. Loans sanctioned against Warehouse Receipts (WHR): Primary: Pledge of stocks.

FARMERS EASY EMPOWERED LOAN (FEEL): KRISHI KALYAN

Objective: To provide timely and adequate credit to farmers to meet production and consumption expenses. To reduce the multiple process of separate application, documentation & EM creation for availment of KCC and PML, thereby reduce the time for delivery of credit. Eligibility: All non-defaulter and credit worthy farmers owner cultivators, tenant farmers, and sharecroppers, having good track record. Facility: Agricultural Cash Credit Maximum Limit: a) Production Credit: No upper limit b) Produce Marketing Loan: Sub limit of Maximum of Rs 25 lacs per borrower Margin: For Production Credit:- A) If scale of Finance is applied- No margin

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Quick Success Series: Agriculture Advances March 31, 2013

B) If computed from cost of cultivation (for limits above Rs 1,00,000/-) -15 -25% Produce Marketing loan:- 40%. Security: Limit up to Rs 1 Lac: Primary: Hypothecation of standing crops and / or stocks stored under produce Marketing Loan. Collateral: Nil Limit above Rs 1 Lac: 1) If production credit portion does not exceeds Rs 1 lac and produce loan is against warehouse receipt & is below Rs 10 lac- Hypothecation of standing crops and/or Pledge of stocks. 2) If production credit limit exceeds Rs 1 lac & produce loan is against warehouse receipt (below Rs 10 lac)- a. Hypothecation of standing crops and/or Pledge of stocks b. Mortgage /charge over the land to the extent of Production Credit Limit.3) If production credit exceeds Rs 1 lac and produce stored in Farmers own go-down- a. Hypothecation of standing crops and stocks. b. Mortgage/charge over land. INTEREST: KCC Loan: As applicable from time to time to crop loan. PML Loan: As applicable to ACC loan. Interest subvention is limited to the crop period as in KCC and not during the period of storage. Repayment: Crop Loan amount will be liquidated from Produce Marketing loan sanctioned to the farmer. Produce Marketing Loan to be repaid within a maximum period of 12 months. Stock Statement: The borrower should submit stock statements for the stocks at bi- monthly intervals Authorized Branches: The scheme will be implemented only in Agri intensive branches (selected by the controllers). Quantum of limit: not to exceed 20% of the eligible production loan limit in case of persons cultivating land and / or 20% of annual income of the applicant from known sources or Rs.25, 000/- whichever is less. Interest rate: On par with Agri Short Term Loans. (2 % above SBAR) Enhanced rate of interest at 2 % p.a. be charged to borrowers who default in repaying the loan. Security: It is a clean and unsecured advance. Repayment: Account will be in the nature of cash credit. The outstanding amount in the GCC should be cleared in full when the applicant is fluid with cash. Renewal: Account will be reviewed every year and renewed after every 3 years. Classification - As per RBI guidelines 100 percent of credit outstanding under GCC up to Rs.25,000/per account will be treated as indirect agricultural financing. Documentation: Application, DP note (COS 229), DP Note Take delivery Letter Arrangement Letter.

ARTHIAS PLUS
OBJECTIVES: To finance commission agents against their receivables from farmers. Eligibility (under Agriculture segment): Commission agents enjoying good reputation and holding a valid license from the market yard/ board and are in the line of business for the past 3 years, having receivables from farmers only, functioning in rural and semi urban markets/mandis. Facility: Cash credit (Hypothecation of book debts not older than 6 months) Classification: Priority sector Agricultural segment indirect Agri Finance. Limit: Max. Rs. 50 Lacs Margin: 40% Security: Primary: Hypothecation of receivables & movable assets (if any). Collateral: Equitable Mortgage of Resi / Comm. Property (Non-Agri) with worth 1.5 times of the advance (Upto Rs. 25 lacs ); 2 times of the advance value (Above Rs 25 lacs and upto Rs. 50 lacs). Interest: (a). Upto Rs. 10 lacs : SBAR (b) Above Rs 10 lacs and upto Rs. 25 lacs : 0.25 % above SBAR. Above Rs. 25 lacs and upto Rs. 50 lacs: As per CRA Model.

GENERAL CREDIT CARD (GCC)

Objective: To provide hassle-free credit to our customers based on the assessment of cash flow without insistence on security, purpose or enduse of the credit. Eligibility: existing customers having satisfactorily conducted deposit accounts including for the last 6 months. Not to be extended to the KCC borrowers. Nature of facility: The credit facility extended under the Scheme will be in the nature of revolving credit i.e., Cash Credit.

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Quick Success Series: Agriculture Advances March 31, 2013

Repayment: Maximum Six months. Loan should be liquidated at the end of cropping season with reasonable time for marketing. # Loans to commission Agents financed by our Urban & Metro branches: Loans upto Rs. 10 lakhs SBF Segment. Loans above Rs 10 lakhs C & I Segment.

SHG CREDIT CARD

Eligibility- Reached third level of credit linkage and enjoying a credit limit of Rs 50000/-. Good repayment record. At least 2 members should be literates to operate the account. -Minimum limit: Rs 50000/- made available as cash credit. Maximum 4 times of the corpus of the SHG. -No separate margin required. Hypothecation of the assets is the security. -Valid for 3 years.

KISAN GOLD CARD SCHEME (KGC)

A general-purpose loan meant for meeting credit needs of farmers for productive and consumption purposes. Eligibility: Farmers having good track record of repayment in their ACC/ATL/KCC accounts for the last two years. New borrowers who maintain sizeable deposit with our branches for the last 2 years. Purpose: Investment credit: 80% of the eligible limit can be utilized for creation or purchase of any productive assets other than for i) Purchase of land, ii) Construction of farm house and iii) Purchase of tractor & its accessories. Consumption loans: To meet domestic expenses like education, marriage, medical expenses etc., 20% of the eligible KGC limit. Limit: Five times the annual farm income or 50% of the value of land (to be) mortgaged as collateral security, whichever is less, with a maximum of Rs. 10 lacs minus term loan outstanding if any at the time of application. This is in addition to KCC limit. Margin: Investment Purpose: 10% Consumption Purpose: 30%. Period: One year from the date of sanction. Repayment: Each loan will have its own repayment schedule, subject to the usual norm of a maximum of 6-7 years for the repayment of AT L ( 9 years for Horticultural orchards). Security: As per ATL. # A single set of loan documents may be obtained for the entire KGC limit sanctioned A separate a/c to be opened for each purpose and separate repayment schedule for each a/c stipulated. Maximum number of accounts permissible is five. Treated as ATL accounts. Cash disbursals are allowed to the full extent of credit limit as in the case of KCC.

SHG GOLD CARD

Eligibility same as for SHGCC -Minimum limit Rs 200000/- sanctioned as Term Loan. Issued only for starting / carrying on economic or income generating activities. -No separate margin required. Hypothecation of the assets is the security -Valid for 3 years.

JOINT LIABILITY FARMERS (JLG)

GROUPS

OF

TENANT

Objectives: To augment flow of credit to tenant farmers cultivating land either as oral lessees or sharecroppers and small farmers who do not have proper title of their land holding through formation and financing of JLGs. -An informal group compromising preferably 4 to 10 individuals (may be considered upto 20) engaged in similar economic activity like crop production, coming together for purpose of availing bank loan either singly or through group mechanism against mutual guarantee. Purpose of loan: crop production, consumption, marketing and other productive needs. Facility as KCC, ACC or ATL depending on purpose. Max loan amount Rs 50000 per individual. Margin as per usual norms, mutual guarantee, no collaterals. NEW TRACTOR LOAN SCHEME (NTLS) (ecir- 390 dt 19/07/2012) Eligibility: Any individual or group of individuals i.e., JLGs/SHGs, institution or organization are eligible for finance which will have sufficient and regular income either from own farm activity or custom hiring incomes from the tractor proposed to be purchased and its accessories. Minimum land holding: Borrower should possess a minimum land holding of 2 Ac.

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Quick Success Series: Agriculture Advances March 31, 2013

Margin: 15% Collateral security: Mortgage of landed property valued equivalent of 100% of loan value Repayment: Maximum of 5 years with a moratorium of 1 month Installment periodicity: i) Equated monthly installments. (Relaxed in tune with the regular flow of funds in the hands of borrowers) ii) Post dated cheques have to be obtained from the borrower for the EMI Interest: 12% p.a. Categorization: Classified under Direct agri advances Tractor and trailer are to be comprehensively insured till the advance is repaid in full. The Tractor Retail Scoring model is applicable for financing purchase of tractors under the new tractor loan scheme. Minimum DSCR should be 1.5 : 1. BMs/RCPCs are permitted to waive this stipulation, provided liquid securities are offered to the extent of 50% of the loan amount. Regional Manager may identify a few branches (2 to 5 branches in each region) to implement the (NTLS) Inspection: Regular loans (any amount) Inspection once in six months. Irregular loans (any amount) - Monthly visits.

SCORING MODEL FOR TRACTOR LOANS

Purpose: To provide finance for purchase of new tractors, accessories and implements. (revised wef 01/01/2011) Features: While proposals with credit score of 56 & above (out of 100) are considered Good Loans for sanction, proposals with credit score of 26 and above but up to 55 may be considered after credit enhancements or to be referred to the next higher authority. Proposals with credit score of 25 and below should not be considered for sanction. Eligibility: Agriculturists (individually or jointly). Margin/Interest: As per ATL. Security: Primary security: Hypothecation of the tractor, accessories and implements. Noting of Banks hypothecation charge in the RC Book. Collateral security: As per scoring. Upfront fee: Loan amount upto Rs.2,00,000/- : NIL. Above Rs.2,00,000/- : @ 1.25% of the amount. Repayment: Within a maximum period of 9 years, including a grace period not exceeding 12 Months, payable half-yearly / yearly, coinciding with the harvesting.

FINANCING OF SECOND HAND / USED TRACTORS SCHEMES: SBI - Mahindra Vishwas & SBI TAFE Nayaroop Objectives: To enable farmers with smaller land holdings to mechanise their farms. Eligibility : Individual farmer or a group of farmers not exceeding three in number (as co- borrowers) owning minimum 3 acres of perennially irrigated agricultural. Tractors which are more than 7 years from the original purchase date shall not be financed. Economic use of tractor: Minimum of 600 working hours per annum. Limit: The overall maximum limit will be Rs.2.50 lac including the cost implements. Margin: 15% on the cost of tractor and implements. DSCR (min): is 1.75. The purchaser (borrower) should either own a minimum of two equipments or the branch should finance the same along with the second hand tractor. Repayment: loan amount should be completed before the expiry of 9 years from the date of original purchase of the tractor inclusive of a maximum gestation period of one year.

FINANCING POWER TILLERS

Farmers or a group of not more than 3 farmers owning 2 acres of land. Farmers owning lesser acerage also become eligible for availing Power tiller loans provided DSCR work out to 1.75 and above, Income from Custom hiring adequate, farmers adopting intensive cultivation practices. Loan Amount: As per Invoice less margin. Margin: A minimum margin of 10% on the total cost of power tiller plus accessories. Security: Primary: Hypothecation of assets. Collateral (up to Rs 1,00,000): Nil. For loans above Rs.1,00,000 and up to Rs.2.00 lacs : mortgage of land, Value shall be at least 50% of the loan amount. Or One third party guarantee, Or liquid at least 50% of the loan amount. Above Rs 2 lacs: EM of land at least 50% of the loan amount. Repayment: Maximum 9 years with one year as gestation period.

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Quick Success Series: Agriculture Advances March 31, 2013 FINANCING FOR COMBINE HARVESTERS
ELIGIBILITY & REPAYMENT: a. For self propelled Combine Harvester: Farmers enjoying high creditworthiness own 8 acres of irrigated land. Minimum DSCR 1.75. Owning lesser acreage can also avail if DSCR is 1.75 and above and liquid at least 50% of the loan amount (sanctioned by RMs only). b. For Combine Harvesters as an attachment /equipment : : Farmers enjoying high creditworthiness own 6 acres of irrigated land. Minimum DSCR 1.75 Farmers should own a tractor of not less than 50 HP. Owning lesser acreage can also avail if DSCR is 1.75 and above and liquid at least 50% of the loan amount (sanctioned by RMs only). Repayment: A repayment period of 9 years (including grace / gestation period). MARGIN: 15 - 25 % Security: Primary Hypothecation of the Tractor / Combine harvester along with accessories purchased out of Banks finance. Collateral: Mortgage of land / Buildings. Other features: Advance only for new harvesters. Models approved by CFMTTI, Budni /FMTTI, Hissar. Security: As per ATL. DSCR 1.75%. Repayment: should be fixed by branches keeping in view the residual life of the tractor. However the loan is repayable in a maximum period of 5 years or up to the last installment of the existing tractor loan, whichever are earlier, (tractors older than 9 years should not be considered). No gestation period should be allowed. DAIRY PLUS (SCHEME FOR FINANCING DAIRY UNITS) To finance milk producing members of AMUL pattern societies recognized private milk dairies posting profit in the past two years. PURPOSE: Construction of dairy shed Purchase of quality milch animals, milking machine, chaff cutter or any other equipment required for the purpose. Eligibility: Individual member of Amul Type society, age below 65 years with min. Individual Dairy < 10 animals min 0.25 acre land per 5 animals for growing feed & able to procure balance locally, > 10 animals 1 acre own or lease land per 5 animals. Limit: A Term loan of Maximum Rs.5 lacs. A working capital @ Rs.2500/- per animal per year may be sanctioned. Min DSCR: 1.75. Margin: As per ATL. Security: Primary hypothecation of assets. Collateral up to Rs. 1.00 lac : Nil. Over Rs.1 lac Mortgage of landed property (or) third party guarantee worth for loan amount (or) group guarantee of other 2 dairy farmers. Repayment: 5 Years in monthly installments with Gestation period 6 months. Rate of interest: As applicable to direct agricultural loans (ATL). Other terms: Minimum yield criteria: Buffaloes 7 lit/day (lactation average) Cow 8 lit/day (lactation average). Fodder cultivation can be financed as per scale of finance. Payment to the bank directly by the society. Milk union operation & milk route facility are essential. SCHEME FOR FINANCING DAIRY SOCIETIES Objectives: To provide finance for creating infrastructure like Construction of milk house or society office, Purchase of Automatic milk

TRACTOR UPGRADATION (SANJEEVANI) (FINANCE FOR REPAIRS, MAINTENANCE AND ADDITION OF NEW IMPLEMENTS
ETC. TO TRACTORS) To assist the farmers, who are regular in their repayments for repairs / maintenance of tractor and for purchase of additional implements Eligibility: who have already availed the loan facility from our bank before three years or more and whose accounts are closed / or regular/standard (IRAC) and who have paid a minimum of 2 yearly installments or 4 half yearly installments after moratorium period are considered eligible for the loan. The borrower should not have availed the benefit of a compromise scheme earlier. Classification: Direct Finance to Agriculture under Priority Sector. Limit: Repairs: Maximum of Rs. 50,000/-. Addition of new implements: Up to a Maximum of Rs. 1, 00,000/- The loan limit should be to the extent by which the existing loan has been reduced Margin: As per ATL.

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collection system, transport vehicles, Bulk chilling unit. Eligibility: Society should have A grade milk societies registered & affiliated to district milk union, no adverse remarks in the audit report of previous 2 years, supplying 1000 lit/day to milk union, audited balance sheet for at least previous 2 years, earning pretax profits for the last two years, borrowing powers as per bye-laws of the Society. Classification: Indirect agriculture finance; Agricultural term loan (ATL). Limit: Maximum 4 times the average profit of previous 2 years maximum Rs 10.00 lacs. Milk house or society office Rs. 2 lakh, Automatic milk collection system Rs. 1 lakh, Milk transportation Rs. 3 lakh, Chilling Unit Rs. 4 lakh. Margin: 15% ROI /Documents: As applicable to ATL. DSCR: Min. 1.75 Security: Primary: Hypothecation of assets. Collateral: Mortgage of landed property (or) Guarantee of milk union. Letter of undertaking from milk union to deduct and pay bank the amount till liquidation of loan. Repayment: Repayable in 5 years with a gestation of 6 months, with monthly installments. BROILER PLUS (Scheme for financing Broiler Farmers under Contract farming) Objectives: extended to both existing farmers and new farmers having Contract Broiler Farming arrangements for enabling them to construct poultry shed and feed room and for purchase of equipments. Eligibility: The applicant should have experience or had undergone training in poultry farming. The farmers should possess adequate land for construction of poultry shed, which should be at least 500 meters away from any existing poultry farm. Economic flock size: The minimum flock size should be 5000 birds. However, financing can be done for 10,000 and 15, 000 birds or part thereof. A model scheme has also been circularized by the Bank. Rearing Period of birds: 7 weeks Margin: 25% Maximum Loan: Rs.9.00 lacs per farmer. DSCR: 1.40 ROI: As applicable to ATL. Type of Advance: Agricultural Term Loan. Security: Primary: Hypothecation of assets. Collateral: Mortgage of land on which the poultry shed and other infrastructure are available or are proposed to be constructed to cover at least 50% of the value of the advance. Repayment: Max 5 years, inclusive of a grace period of 6 months, with installments at bimonthly intervals. Other terms: Copy of Bi-partite agreement between the farmer and the hatchery as per the banks specimen, Letter of undertaking to the Bank by the broiler integrator. WC not needed as it is met by hatcheries. SCHEME FOR FINANCING MICRO FINANCE INSTITUTIONS (MFIs) / NON GOVERNMENT ORGANISATIONS (NGOs) (ecir-1283 dt. 26/03/2013) To enable the Bank to lend to MFIs/NGOs for on lending to SHGs /JLGs/ Individuals and to increase the outreach by financing large number of SHGs in cost effective manner, supplementing the efforts of the branches in financing SHGs. Eligibility: NGOs/ MFIs should any one Regd Society/ Regd Trust/ Regd Company/ Non Banking F Is or any Institution engaged in micro-finance. NGO/ MFI having minimum partnership of SHG/JLG 50 and individuals - 500. In cluster financing min membership of Federation should be 30 SHGs. Existing for last 12 months and running micro credit programme for last 6 months, continuous profit making, maintains a satisfactory & transparent accounting, MIS and Internal Audit System, not be defaulter, having risk portfolio less than 5% etc. Rating: Loan below Rs 25 lacs Specific Scoring model min 60 marks. For loan of Rs.25 lacs and above - CRA rating is compulsory as applicable to NBFC model and guidance note on banking exposure to be followed i.e, SB 5 and above for new connections and SB 7 for enhancement. Rating from external rating agency Facility: MTL or CC. Margin: Nil. TOL/TNW: Maximum permissible TOL/TNW to be 5 and additionally Debt /Equity is capped at 5:1. Repayment: TL Monthly/ Quarterly/ HY installments on the basis of project/ purpose, max 3 yrs. CC renewal annually.

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Security: Primary Hypo of Book debts, Collateral: For Non-NBFCs -Nil, however, Guarantee of Promoters and charge over available assets to be explored. For NBFCs/ NBFC-MFIs - The collateral security to be obtained from NBFCs / NBFC-MFIs under the scheme shall be as per the guidelines for collateral security applicable for NBFCs Sanctioning Authority: Not below AGM. SCHEME FOR DEBT SWAPPING OF BORROWERS To extend finance to farmers for paying off loans taken from non institutional lenders (e.g. money lenders etc.) and to enable such farmers in distress, meet their crop production needs. Eligibility: All existing farmer borrowers as well as other farmers in the operational area of the branch. Classification: Direct Agriculture. Quantum of loan: The loan granted shall be 100% if the debt is on account of cultivation or agri activity or Rs.1,00,000/- (ecir- 1024 dt. 08.03.2011) whichever is lower. Simultaneously, the applicant shall be financed Kisan Credit Card which includes additional 20% of the production limit to meet contingent requirements or / and Agriculture Term Loan. The amount of debt of the farmer is assessed based on the stamped affidavit given by the applicant. Method of assessment: a. Debt being financed will be given as an ATL repayable in 3 to 5 years b. Gross DSCR of 1.75 will be maintained. Sanctioning authority: The Branch Manager/Division Manager only should sanction loans under this scheme strictly. Disbursement: disbursed preferably to the money lenders, an appropriate receipt for the discharged debt from the money lender should be obtained and kept with the loan documents. Security: All the existing security available with us both primary & collateral should be extended to cover the loan. Collateral security by mortgage of agriculture property. Repayment: Repayable in yearly/half yearly installments in three to five years. LAND PURCHASE SCHEME To assist Small & Marginal farmers, Tenants Cultivators, Share Croppers and landless agricultural labourers for purchase of land. Eligibility: The borrowers should have a record of prompt repayment of the loan for at least two years. Good borrowers of other Banks may also eligible provided they liquidate their outstandings to other banks. Quantum of loan: Maximum Rs. 5 lacs. (Excluding development charges) Loan may be considered for: Cost of land. Provision of irrigation facilities & land development (shall not exceed 50% of the cost of land). Purchase of farm equipments. Registration charges & stamp duty. Farmers assisted under the scheme may also be given crop loans (KCC only) Margin: As per ATL. Gestation period: 1-2 years: If it is to be developed. 6 Month-1year: Developed land Repayment: Max. 9-10 years beginning after the expiry of gestation period, with half-yearly installments. Security: To be secured by way of mortgage of land to be purchased. SETTING UP OF AGRI-CLINIC & AGRI BUSINESS CENTRES SCHEME (ACABC Scheme) To provide self employment opportunities to technically trained persons. Eligibility: Persons having technical degree in Agricultural or allied to agriculture like horticulture, animal husbandry, forestry, dairy, veterinary, poultry, pisciculture and other activities. The subsidy would be admissible only in respect of agricultural graduates trained under ACABC scheme on or after 1st April, 2004. Project cost: Individual Activity Rs.20 lacs. Group Activity Rs.100 lacs . In case of group projects, if the group consists of 5 or more persons, all except one of them would have to be agriculture graduates trained under the scheme and the remaining could be non-agri graduate with experience in business development and management. Margin: Upto Rs. 5.00 lacs NIL. Above Rs. 5.00 lacs - 15 - 25% Facility: Ag. Term Loan (Indirect Finance) Security: Upto Rs. 5.00 lacs: Primary: Hypothecation of assets created. Collateral: NIL Above Rs. 5.00 lacs. Primary: Hypothecation of assets created. Collateral: Mortgage of land or

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Third party guarantee with the permission of controller. Repayment: 5-10 years with grace period of maximum 2 years. Training: MANAGE (National Institute for Agricultural Extension Management) in Hyderabad is responsible for providing training. Refinance: 100 % By NABARD. Soft loan assistance: 50 % of margin to be contributed by the applicant is provided by NABARD as Soft loan without any interest. Subsidy: There is a provision for enhanced available only for godowns of capacity 100 tonnes (minimum) and a maximum capacity of 10,000 tonnes. 50% of subsidy by NABARD on submission of a project profile-cum-claim form immediately on sanction, the remaining 50% on completion of the project. Subsidy for renovation / expansion of rural godown available only to Co-operatives (25%). Margin: 25%. In NE states & hilly areas and SC/ST: 20%. Security: Mortgage / charge over land and godown. Repayment: 11 years with a grace period of one year. Other conditions: The entrepreneur may obtain a license to operate the godown under the State Ware Housing Act or any other relevant laws. The rural godowns of 1000 tonnes capacity and above should get accreditation from the Central Ware Housing Corporation (CWC). FINANCING COLD STORAGE Objectives: To promote setting up of cold storage and reducing post harvest losses. Eligible Organisations : Individuals / Farmers, Group Farmers / Growers, Companies, NGOs, Partnership / Proprietary Firms, Corporations, Cooperative Agricultural Produce Marketing Committees, Marketing Boards / Committees and Agricultural Industries Corporations. Project Cost: An estimated project cost of upto Rs.16.00 crores may be considered. Margin: 25% of the project cost. Subsidy: The projects of upto 5000 MT capacity are eligible for capital subsidy of upto 25% of project cost subject to a maximum of Rs.50 lacs and in case of projects in NE States and hilly areas and those belonging to SC/ST, 33.33% of project cost, subject to a maximum of Rs. 60 lacs. Subsidy is provided by National Horticulture Board (NHB), through NABARD as a back-ended subsidy. For loans upto Rs.20 lacs inspections will be conducted by the Officials from the Banks concerned. For loans of above Rs.20 lacs, joint inspection will be conducted as above with NHB officials. Pattern of Assistance: 25 % promoters Contribution (Margin), 50 % Term Loan from Bank, 25 % back-ended Capital Investment Subsidy by NHB.

composite subsidy @ 36% of total fund outlay (44% in the case of women/ SC/ST candidates from NE and hilly states).
GRAMIN BHANDARAN YOJANA CAPITAL INVESTMENT SUBSIDY SCHEME FOR CONSTRUCTION / RENOVATION OF RURAL GODOWNS OBJECTIVES: To create scientific storage capacity in the rural areas to meet the requirements of farmers for storing farm produce. To prevent distress sale of produce by farmers immediately after harvest by promoting pledge financing and marketing credit. Eligibility: Proprietary & Partnership firms Cooperatives, Companies, APMC, Agro Industrial Corpn., NGOs, Group of farmers, SHG Individuals, Market Board etc. Subsidy for renovation/ expan. Of rural godown available only to Co-operatives. Project cost: Assistance under the scheme will be available on capital cost of construction of godowns. Godowns exceeding 10,000 tonnes capacity, the subsidy would be restricted to that admissible for capacity of 10,000 tonnes only. Subsidy:
Ceiling on maximum subsidy In case of 33.33% subsidy In case of 25% subsidy In case of 15% subsidy North Eastern States, Sikkim and hilly areas. Rs 3.333 Cr. Other than NE states, Sikkim and hilly areas. Rs 3 Cr.

NA NA

Rs 2.25 Cr. Rs 1.35 Cr

(E-CIR 1042 dt. 25.02.2012) Subsidy for renovation/ expansion of rural godown available only to Co-operatives(25%),

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Security: As applicable to Agricultural Term Loans. Rate of Interest: As per rates applicable to ATLs. Documentation: As applicable to ATLs. Repayment: The loan has to be repaid within a maximum period of 9 years inclusive of a grace period of 2 years installments are fixed depending on the cash flow. Classification: Indirect Finance to Agriculture under priority Sector. SCHEME FOR FINANCING PRIVATE COLD STORAGE /PRIVATE WARE HOUSES FOR ONLENDING TO FARMERS Purpose: For financing private cold storages/warehouses for on lending to farmers against agricultural commodities stored in the cold storage / warehouse. Eligibility: All private cold storages/warehouses if the promoters are of good repute and Integrity, capacity of the cold storage more than 5000 MT, registered post-tax profits for the last 3 years, all their existing accounts classified as standard asset. New cold storages can also be considered with the permission of the controlling authority. Limit: Will be equivalent to 60% of the value of their operating capacity or 60% of the average value of produce/commodities stored during the past 12 months whichever is lower. Minimum: Rs.25.00 lacs; Maximum: Rs.1.00 crores. Type of Facility: Clean Cash Credit. Security: Primary: NIL. Collateral: EM of the warehouse / cold storage to cover100% of loan. Personal guarantee of the proprietor /partners / directors. Interest rate: Interest rate is fixed based on the CRA as applicable to Agricultural Advances. Units with CRA rating of SB4 and below should not be financed. Renewal/Repayment: The limit is valid for 12 months and needs to be renewed every year. The cash credit account should be brought into credit balance by the end of November each year. Segmentation: Indirect Agricultural Advances under priority sector. SCHEME FOR FINANCING SEED PROCESSORS Objectives: To extend financial assistance to the seed processors against their receivables due to them from the seed growers. Eligibility: Seed processors / units enjoying good reputation & credit worthiness, holding a valid license from the concerned State Department of Industries for installation of Seed Processing Plant, having valid certificate from Seed Certification Department, Doing business for the last 3 years, having receivables from the farmers, who have posted profits during the past two years of operation. Facility: Agriculture Cash Credit (Hypothecation of receivables not older than 6 months). Loan amount: Need based ACC limit without upper ceiling but above Rs.2.00 lacs. ROI: Interest rate will be charged @ 1% below SBAR min 9.75% for limits above Rs 2 lacs but below Rs 25 lacs. For limit above Rs 25 lacs as per CRA rating. Margin: 40 % of the value of the receivables. Security: Primary: Assignment/hypothecation of receivables from the farmers. Collateral: EM of residential/ commercial property worth 1.5 times the limit . Assessment: As applicable to trade advances. A simple certification / debts of receivables not older than 6 months and a maximum of 60% of aggregate value of receivables should be fixed as the credit limit. Other terms: Loan to be liquidated within a maximum period of 6 months for each crop season i.e., Rabi & kharif. Statement of eligible receivables should be obtained at half yearly intervals. MORTGAGE LOAN TO SEED PROCESSING UNITS Purpose: To Provide hassle free finance to Seed Processing Units who are willing to furnish mortgage of property of adequate value. Eligibility: Existing customers, new connections including takeovers, first generation entrepreneurs as well as promoters of existing units Nature & type of facility: Fund Based - Cash Credit Quantum of Loan: Minimum Rs.5,00,000 & Maximum Rs.1.00 crores. Assessment of Limits: 65% of the realizable value of the property subject to a maximum of 40% of the projected annual turnover. Margin: 35% of realizable value of property

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Processing Fee: Working capital limits (Fund Based +Non Fund Based) For limits above Rs.5 lacs-Rs.250/- per lac or part thereof. Maximum Rs.10 lacs. Security: Primary: Hypothecation of stocks and receivables. Collateral: Tangible security of minimum of 153% of loan amount in the form of Equitable Mortgage of land & building. Repayment: On Demand. Stock Statement: Only once at the time of execution of documents and as on 28th February every year. Inspection: inspected by the field staff, once before sanction and at after disbursal for Standard Asset: once a year by Field Officer, for Sub standard Asset: the account to be reviewed immediately and the inspection to be done at quarterly intervals. CAPITAL INVESTMENT SUBSIDY SCHEME FOR COMMERCIAL PRODUCTION UNITS OF ORGANIC INPUTS UNDER NATIONAL PROJECT ON ORGANIC FARMING Objective: To promote organic farming in the country by making available the organic inputs such as Biofertilizers and Biopesticides and Fruit and vegetable waste compost. Eligibility: New as well as existing units (for expansion / renovation) engaged in the production are eligible under the scheme e.g Biofertilisers and Biopesticides production Unit, Fruit and Vegetable Waste Compost production Unit. Pattern of assistance: TERM LOAN- Owner's contribution 25%, Subsidy from Government of India 25% subject to the maximum ceiling, Bank loan 50%. Project cost: Project cost can include the cost of land and land development, civil works, equipments etc. The value of land should not exceed 10% of the project cost. The cost of land computed in the project cost can be reckoned towards the margin money required to be met by the enterprise. Subsidy: 33% of the project cost max 60 lac for Fruit and Vegetable Waste Compost Unit , 25% of the project cost max 40 lac for Biofertilisers/ Biopesticide Unit. (ecir- 417 dt 11.08.2011) ROI: As applicable to Ag. advances Security: The security will be as per norms prescribed by RBI from time to time. Repayment: 10 years with a grace period of 2 years for Biofertilisers Unit & Fruit and Vegetable Waste Compost Unit. FINANCING OF ORGANIC FARMING Objectives: To prevent degradation of precious arable land and pollution of water from the abuse of chemical fertilizers/pesticides/insecticides and to capture the branded domestic retail and export market opportunities. Eligibility: All individual farmers i.e., our existing borrowers and creditworthy new borrowers, JLGs engaged in crop production activity. The prospective borrower(s) shall own individually or collectively min. 4 acres of irrigated land / 10 acres of dry (rain fed) land. Classification: Direct Agriculture Quantum of Loan: (ATL & KCC) as per banks prescribed norms. The conversion period from conventional to organic farming is about 3 years. Gross DSCR of 1.75 to be maintained Margin (for ATL): 20% of the project cost own contribution or subsidy received. Gestation period: 3 years Repayment: Overall repayment period will be up to 9 years including 3 year gestation period. Subsidy: From National Horticulture Mission (NHM) : @ Rs. 10,000/- per hectare subject to a limit of 4 hectares per beneficiary. Rate of Interest: Card Rate. Security: Primary: Hypothecation of assets created & crops to be raised. Collateral: Mortgage of land OR any other readily realizable liquid/ immovable security of adequate value for Individual Farmers. Only mutual guarantee for JLGs (ATL & ACC Max. Rs. 50,000/per member. Max. 10 members / group). BIO GAS PLANTS ( FAMILY TYPE) SCHEME Eligibility: Individual farmers, including members of JLG / SHGs, owning minimum of 4 animals. Quantum of loan : Loan amount will be the cost of Bio gas plant and installation charges less stipulated margin. Unit costs (ranging approx from Rs 16000 Rs 20000 for biogas plants of 2 cu mt / 3 cu mt sizes respectively) fixed by the State level Committee for different sizes of biogas plants for different regions should be adopted.

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Subsidy: The Ministry of New and Renewable Energy is providing subsidy up to 50% of the cost of biogas plants. Margin is waived for limit up to Rs 100000/ Security: For aggregate limit Up to Rs 100000/ Hypothecation of assets created out of bank finance. Repayment: Repayment in 5 years in Monthly/ Quarterly / Half Yearly instalments ( depending of the source of income from agriculture/ allied activities) Classification: Direct Agricultural. PODUCER COMPANIES Combination of 10 or more individuals and producer institutions (co-operative societies) can get incorporated as Producer Company under the Act. Maximum members can exceed 50. No cap in membership. Objectives- Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export/import of primary produce etc. Financing Modality: a) Individual members on the guarantee of the Producer Company b) Producer Companies: Lending Powers for on lending to Members. c) Aggregated Finance to Producer Companies: for on lending to Members. As per RBI guidelines, Loans granted to Producer Companies up to an aggregate amount of Rs 1 crore for the following activities is treated as DIRECT FINANCE to Agriculture. # Short Term Loans for raising crops i.e. crop loans # Produce Marketing Loan up to Rs 10 lacs # Working Capital and Term Loans for financing production and Investment requirements for Agriculture and Allied activities. # Loans granted for pre harvest and post harvest activities such as weeding, harvesting, grading, sorting and transporting. One third of loans in excess of Rs one crore in aggregate per borrower for Agriculture & allied activities is also classified as Direct Finance to Agriculture. Remaining two third of loans in excess of Rs one crore in aggregate per borrower for Agriculture and allied activities will be treated as Indirect Finance to Agriculture.

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