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    Agriculture Loans

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    Venkatarao Akkidasari
    Agriculture loans are important because agriculture is still the main livelihood for over half of India's population and provides raw materials for other industries. While India achieved record food grain production, it may not be enough to improve living standards for farmers. There is a need for financial assistance for agriculture in India. Major banks like SBI, nationalized banks, and cooperative banks provide various types of agriculture loans at subsidized interest rates to support farmers and the agriculture sector.

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    Agriculture Loans

    Uploaded by

    Venkatarao Akkidasari
    45 views3 pages
    Agriculture loans are important because agriculture is still the main livelihood for over half of India's population and provides raw materials for other industries. While India achieved record food grain production, it may not be enough to improve living standards for farmers. There is a need for financial assistance for agriculture in India. Major banks like SBI, nationalized banks, and cooperative banks provide various types of agriculture loans at subsidized interest rates to support farmers and the agriculture sector.

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    Agriculture loans are important because agriculture is still the main livelihood for over half of India's population and provides raw materials for other industries. While India achieved record food grain production, it may not be enough to improve living standards for farmers. There is a need for financial assistance for agriculture in India. Major banks like SBI, nationalized banks, and cooperative banks provide various types of agriculture loans at subsidized interest rates to support farmers and the agriculture sector.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    45 views3 pages

    Agriculture Loans

    Uploaded by

    Venkatarao Akkidasari
    Agriculture loans are important because agriculture is still the main livelihood for over half of India's population and provides raw materials for other industries. While India achieved record food grain production, it may not be enough to improve living standards for farmers. There is a need for financial assistance for agriculture in India. Major banks like SBI, nationalized banks, and cooperative banks provide various types of agriculture loans at subsidized interest rates to support farmers and the agriculture sector.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Why Are Agriculture Loans Important

    As on 2015, agriculture is still the principal source of livelihood for more than
    half the population of India or are related to agriculture as most of the Indian
    rural side is still dependent on agriculture as a profession. This is also
    because this industry provides the maximum amount of wage goods required
    by non-agriculture sectors and most of the raw materials for the industries
    sector. The Central Government, State Governments and the farming
    community have succeeded in achieving record production of 244.78 million
    tonnes of food grains during 2010-11 but it may still not be enough for the
    community to enhance their standard of living. There is an immense
    requirement of financial aid necessary for agriculture in India.

    Fees and Charges for Agriculture Loan


     Foreclosure charges – Will be levied if the borrower prepays their loans and
    closes their loan account before the completion of the loan repayment
    term.
     Processing fee – A one-time processing fee will be deducted from the
    borrower’s sanctioned loan amount before it is disbursed.
     Late payment charges – If the EMI is not paid as per the schedule specified
    by the lender, late payment charges will be levied.
     Stamp duty charges – Will be charged at actuals or as per the applicable
    state laws.
     Bounce charges – Will be charged if the repayment cheque bounces.
     Valuation charges – Will be charged if the applicant’s residential or
    commercial property undergoes valuation.
     Documentation charges – Will be charged as applicable.
    *Note: Not all charges mentioned above will be levied by all lenders. Also,
    you may have to pay other charges as per your lender’s terms and conditions.

    Types of Agriculture Loans


    There are various banks around the country that aid farmers across their
    designated regions when it comes to agriculture finance, available in
    exclusive government recognised banks to maintain maximum transparency
    in loan handling as well as to ensure that farmers do not have to deal with
    paying extra for taking loans from a repetitive bank.

    State Bank Agriculture Loans


    The bank has the largest network in the country, with a branch functioning
    with all facilities in the most rural parts of the country. These schemes
    include Crop Loans, Produce Marketing Loan Scheme, Loan Against
    Warehouse Receipts, Kisan Credit Card Scheme, agricultural term loans,
    Land Development Scheme, Farm Mechanisation Scheme, Financing Of
    Combine Harvesters, Minor Irrigation Scheme, Kisan Gold Card Scheme, Land
    Purchase Scheme, Dairy Plus Scheme, Krishi Plus Scheme, Arthias Plus
    Scheme, Broiler Plus Scheme, Finance To Horticulture, Lead Bank Scheme
    and Agri Business Heads Scheme. The Bank also provides Microfinance
    through Self Help Groups along with loans through 30 regional rural banks.

    Check more details about SBI Agriculture Loan

    Nationalised Bank Agriculture Loans


    Nationalised banks that provide agricultural loans include Punjab National
    Bank, Union Bank of India, UCO Bank, Vijaya Bank, United Bank of India,
    Syndicate Bank, Oriental Bank of Commerce, Dena Bank, Allahabad Bank,
    Andhra Bank, Bank of Baroda and Indian Bank only to name a few. In fact
    most nationalised banks have facilities for farmers to make the most of low
    agriculture loan interest rates.

    Co Operative Agricultural Bank Agriculture Loans/


    NABARD
    Is responsible for refinance disbursement to commercial banks, State
    cooperative banks, State cooperatives, rural development banks, Regional
    Rural Banks (RRBs) and other eligible financial institutions. It also sanctions
    money through its Rural Infrastructure Development Fund for projects
    covering irrigation, rural roads and bridges, health and education, soil
    conservation and drinking water schemes. NABARD also offers a Kisan
    Credit Card Scheme and crop loans under the Rashtriya Krishi Bima Yojana.

    FAQs
    1. 1. Do lenders charge a fixed or floating rate of interest?
    Agriculture loans can have fixed or floating interest rates, based on the
    lender’s terms and conditions. Ensure that you check which of the two
    interest options you are comfortable with before you borrow a loan.
    2. 2. How can I reduce the interest charged for an agriculture loan?
    It is in your best interest to compare the interests charged by different
    lenders and opt for a loan with a competitive rate of interest and repayment
    terms. Also, if you have a prior banking relationship with the lender, you
    can negotiate for a lower rate of interest.
    3. 3. How is the interest paid by the borrower?
    The interest will be paid as part of your monthly EMI.
    4. 4. Will my interest decrease if I make pre-payments?
    No, the interest that you are charged will remain constant throughout the
    policy tenure, unless you choose a loan with a floating interest rate.
    However, if you make pre-payments, the monthly EMI that you will have to
    pay will decrease, thus reducing the financial burden.
    5. 5. How often can I expect the interest rate to change if I borrow an
    agriculture loan with a floating rate of interest?
    Floating interest rates will only change if there is a change made to the
    bank’s Marginal Cost-Based Lending Rate (MCLR).
    A GST rate of 18% will be applicable on banking services and products from
    01 July, 2017.

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