Qss Agri Advances 2015

1

Quick Success Series – Remittance & Collection

Quick Success
Series

QUICK SUCCESS SERIES was initiated in the year
2010 by Team SBLC Deoghar with a motive of
learning support to the candidates of
promotional examinations of different grades
in the Bank they had to undergo. With the
passage of time QSS became popular among its
readers and SBLC Deoghar is receiving
overwhelming demand for its updated version
year after year from employees of SBI located
in various parts of the country. We extend our
sincere thanks to the readers of QSS for placing
with us the demand of QSS whenever the date
of promotional test is announced.
We take this opportunity to acknowledge active
persuasion of Sri Manish Tandon, our Circle
Development Officer for its updation before
schedule.
I take pride in representing a Team comprising
of Sri Champak Das, Chief Manager
(Training),Sri Rakesh Roshan, Chief Manager
(Training) & Sri Mukul Manohar, Chief
Manager (Training), who have maintained the
trend of SBLC Deoghar and are constantly
contributing towards its value addition and
keeping it relevant, up to date for the users &
they took extra pain for its updation.

Agriculture Advances

We hope that QSS 2015 edition will be equally
useful for various promotional exams. Though
every care has been taken while updating the
contents, we also request our readers to point
out any lapses at the earliest. This book is
however not a substitute for circular
instructions issued by the Bank from time to
time. For detailed guidelines please refer to
Bank’s latest circulars. Soft copy of this edition
is available on our ftp://10.151.51.33 in QSS
folder & on SBI TIMES>PATNA CIRCLE>SBLC
Deoghar site.
Team SBLC Deoghar is humbled by the
response and recognition, it is receiving from
various readers. Our Team wishes the readers
grand success in their endeavours.
S P Singh
Assistant General Manager,
State Bank Learning Centre,
Deoghar- 814112
Phone- 06432-232895
Fax - 06432-231810
E-mail:[email protected]

Compiled and updated By

Champak Das
Chief Manager Training, SBLC Deoghar
Mobile-9431866154
Email- [email protected]

[Type text] Page 1

Updated as on

15th Jan 2015
2015 2014

Quick Success Series: Agriculture Advances
January 15, 2015
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.
AGRI BUSINESS: RBI GUIDELINES-PRIORITY
SECTOR LENDINGUPWARD REVISION IN LIMITS
OF PML TO RS 50 LACS AND AGRI INPUT DEALER
LOANS TO RS 5 CR (e-cir-119-08.05.2013)
Limits sanctioned to dealers/sellers of fertilizers,
pesticides, seeds, cattle feed, poultry feed,
agricultural implements and other inputs, up to Rs
1 cr were earlier classified under indirect agri
advances. This limit has now been raised to Rs 5 cr
per borrower.
 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

Page 2

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 Group’s 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.

Quick Success Series: Agriculture Advances
January 15, 2015
 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.
 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 (Invariably for Rs
1 lac and above) (e-cir-546-26.08.2013)
AB-1 (Simplified): 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.

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

Page 3

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.
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.

Quick Success Series: Agriculture Advances
January 15, 2015
 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
20 cheques or cheques covering the full /
remaining repayment period, whichever is less,
should be obtained at the time of sanction of
loan.
 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

Page 4

Agri Business: Implementation of Credit Scoring
Models (e-Circular Sl No.834/2014-15 dated
13.10.2014)
With the roll out of Agri LOS, Credit Scoring
Models have gained importance. Hence, it has
been decided to roll out scoring models covering
all Crop Loans, Irrigation, Land Development,
Horticulture and plantation, Dairy and Poultry for
implementation with immediate effect.
The Scoring Models will enable faster lending
decisions and strengthen the existing system of
sanction or rejection of loan applications.
While proposals with credit score of 71 & above
are considered ‘Good Loans’ for sanction,
proposals with credit score of 26 and above but
up to 70 may be considered
a) after credit enhancements or
b) application to be referred to next higher
authority
Proposals with credit score of 25 and below
should not be considered for sanction.

Quick Success Series: Agriculture Advances
January 15, 2015

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

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
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 :
Fixed ‘repayment due dates’ given for KCC
accounts are assessed based on cropping pattern:
Mono crop - Kharif : 31st January or date fixed by
SLBC/DLTC.
Mono crop - Rabi : 31st July or date fixed by
SLBC/DLTC..
Double / Multiple crops : 31st July date fixed by
SLBC/DLTC.

Page 5

Actual repayment due date for long term crops is
12 months from date of sanction / disbursement
date fixed by SLBC/DLTC.
(e-Cir Sl No.593/2014-15 dt 20.08.2014)
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.

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%.
Advances against security of gold coins per
customer to gold coins weighing up to 50 gms
only. However, these instructions are not
applicable to loan against gold ornaments and
jewellery. (e-cir-98-04.05.2013)
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.
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.

Quick Success Series: Agriculture Advances
January 15, 2015
@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.

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 including group of 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. Non-individuals like Partnership firms,
Corporate etc
engaged in agriculture and allied agri-activities.
Type of Loan: Demand Loan
Sanction limit: 60 % of values of produce
depending upon the place of storage, subject to a
maximum limit of Rs. 50 lacs.
Margin: 40%
Security: 1.Loan sanctioned against goods stored
in Farmer’s godown:
Primary: Hypothecation of stocks.
Collateral: Mortgage of land for loans above Rs.
1,00,000/-.
2. Loans sanctioned against Warehouse Receipts
(WHR):
Primary: Pledge of stocks.
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.
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 farmer’s own
house/warehouse).
2. When produce is stored in a

warehouse/cold storage, the Branch Manager
will inspect the warehouse(s) every quarter.
(ecir-389 dt. 22.07.2013)
*with effect from 01.04.2013, loans to individual
farmers
up
to
50
lakh
against
pledge/hypothecation of agricultural produce
(including warehouse receipts) for a period not

Page 6

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 50 lakh. (ecir- 389 dt
22/07/2013)

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
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.

Quick Success Series: Agriculture Advances
January 15, 2015
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).

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.
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.

Page 7

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.
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.

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.

Quick Success Series: Agriculture Advances
January 15, 2015
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 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.

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.

Page 8

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.
MODIFIED NEW
(Modified NTLS)

TRACTOR

LOAN

SCHEME

(eCir- 1187/2014-15 dt 06/01/2015)
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 acres.
Quantum of Loan: a. The total cost of tractor,
cost of accessories and implements (As per the
dealer net price invoice obtained from reputed
dealers of tractors of the approved tractor
companies for the approved models)
b. Add: Additional amount for insurance and
registration
c. Less: Margin to be brought in by the applicant
(minimum 15%)
d. Net Bank Loan:
Minimum of loan amount: No Minimum,
Maximum of loan amount : No ceiling.
Margin: 15% of the total cost of tractor, cost of
accessories,
implements,
insurance
and
registration.

Quick Success Series: Agriculture Advances
January 15, 2015

Security:
a. Loan limit Upto Rs.1,00,000
Primary: Hypothecation of Tractor,
accessories and Implements purchased
out of Bank finance.
Collateral: NIL
b. Loan limit Above Rs.1,00,000
Primary: Hypothecation of Tractor,
accessories and Implements purchased
out of Bank finance.
Collateral: Registered/equated mortgage
of land for Value not less than100% of the
loan amount or third party guarantee,
good for the amount involved.
If there are genuine difficulties in the
creation of mortgage/charge on lands
wherever required, branch may take Third
Party
Guarantee
after
obtaining
permission
from
the
Controlling
Authority.
Repayment:
In order to have a standardized approach for
regular repayment every month and to maintain
connectivity with the customer, the total scores
awarded under parameters ‘Hiring Potential’ plus
‘% age of income from Allied Activities’ in “Tractor
Scoring Model” will be adopted to determine the
repayment schedule of the Tractor Loan.
Combined
Marks scored
Under (Hiring
Potential + %
age of income
From
allied
activities)

Loan Repayment

11- 14

Monthly EMI covering Principal
+Interest
Monthly Rs.1000 per Lakh of loan
outstanding to service interest and
residual interest plus Principal at
Quarterly intervals

6-10

5 and below

Monthly Rs.1000 per Lakh of
loan outstanding to service
interest and residual interest
plus Principal at Half yearly
intervals

Page 9

Post dated cheques have to be obtained from the
borrower for the EMI.
Interest: As applicable to Agriculture term loan
time to time.
Limit
Rates(%) p.a
Effective rates
( B.R + Spread) %p.a
Irrespective of 10 +2 = 12.00
12%
the loan limit
For prompt repayment, further concession of
interest @1% p.a by way of incentive is extended
to the borrower. Concessions will be extended in
the month of July and will be on the basis of
installment recovered between 1st July to 30th
June of every year.
Penal interest during the irregularity period:
1.00% p.a
Penal interest for failure to get the vehicle
registered within one month from the date of
delivery: Levy @2% for the period of default for
the borrower (to be recovered by branches)

Stree Shakti Tractor Loan (SSTL)
(e-Circular Sl No.268/2014-15 dated 11.06.2014)
Eligibility:
a) The loan shall be sanctioned with women as coborrowers.
b) Minimum agriculture land holding of 2 acres in
the name of borrower(s).
c) Minimum net annual income of the borrower(s)
is Rs.1.50 lacs from farm activity /custom hiring /
other sources.
d) Income of the co-borrower(s) may be reckoned
for arriving at Net Annual Income.
e) EMI / NMI shall not exceed 60%.
f) Branches should verify and ensure that cost of
accessories purchased, if any, along with the
tractor is reasonable and whether they are
actually required by the borrower(s).
Margin:
a) SSTL Without Collateral security: Min. of 50%
b) SSTL With Collateral security: Min. margin 10%
Primary security
a) Hypothecation of tractor & accessories.
b) Insurance: The tractor and accessories
purchased with bank’s finance have to be
comprehensively insured for the full value.
Collateral Security:
a) Mortgage of immovable properties is not
envisaged.

Quick Success Series: Agriculture Advances
January 15, 2015
b) Security of gold ornaments, NSC, Time Deposits
(advance value of gold ornaments, time deposits,
NSC) to the extent of a minimum 30% is obtained
for loans sanctioned under ‘SSTL with Collateral’.
Repayment
a) SSTL Without Collateral security: Maximum 36
EMIs with 1 month moratorium.
b) SSTL With Collateral security: Maximum 48
EMIs with 1 month moratorium.
Interest:
a) SSTL Without Collateral security: 1.75% above
Base Rate.
b) SSTL With Collateral security: 1.50% above
Base Rate
c) Penal interest during the irregularity period:
1.00% p.a.
d) Penal interest for failure to get the vehicle
registered within one month from the date of
delivery attracts: 2% for the period of default for
the borrower (to be recovered by branches).

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
Bank’s 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.
Inspection: Regular loans (any amount) Inspection once in six months. Irregular loans
(any amount) - Monthly visits.

Page
10

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.

Quick Success Series: Agriculture Advances
January 15, 2015
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 Bank’s finance. Collateral:
Mortgage of land / Buildings.
Other features: Advance only for new harvesters.
Models approved by CFMTTI, Budni /FMTTI,
Hissar.

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

Page
11

Margin: As per ATL.
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.

Quick Success Series: Agriculture Advances
January 15, 2015
SCHEME FOR FINANCING DAIRY SOCIETIES
Objectives: To provide finance for creating
infrastructure like Construction of “milk house or
society office”, Purchase of “Automatic milk
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

Page
12

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
bank’s 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.

Quick Success Series: Agriculture Advances
January 15, 2015
Repayment: TL – Monthly/ Quarterly/ HY
installments on the basis of project/ purpose, max
3 yrs. CC – renewal annually.
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.

Page
13

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.

Quick Success Series: Agriculture Advances
January 15, 2015
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
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

composite subsidy @ 36% of total fund outlay
(44% in the case of women/ SC/ST candidates
from NE and hilly states).
Agricultural Marketing Infrastructure (AMI)
[Gramin Bhandaran Yojana & Scheme for
Development/ Strengthening of Agriculture
Marketing
Infrastructure,
Grading
and
Standardization (AMIGS) Subsumed in Scheme
for
Financing
Agriculture
Marketing
Infrastructure (AMI)]
(Please refer e-Circular Sl No. 402/2014-15 dated
17.07.2014)
It has been advised by NABARD that the two
aforesaid Schemes have been subsumed with
effect from 01.04.2014 into a new Scheme named
Agricultural Marketing Infrastructure (AMI) for
implementation during the 12th Plan period. The
objective of the captioned Scheme is to
encourage creation of post harvest storages and
primary processing value chain in agriculture,
from post-harvest management to the stage of
primary processing, by transfer of direct benefit
to farmers.
Particulars: Gramin Bhandaran Yojana is being
implemented since April 2001 and the Scheme for
Development/ Strengthening of Agriculture

Page
14

Marketing
Infrastructure,
Grading
and
Standardization (AMIGS) is being implemented
since 20.10.2004. It has now been decided that
the existing two schemes be subsumed with
effect from 01.04.2014. In respect of all the
projects sanctioned under the previous guidelines
(sanctioned till 31.03.2014), claims of Subsidy ha
to be submitted to the concerned Regional Office
of NABARD, as per the then prevailing guidelines
of the Schemes viz Gramin Bhandaran Yojana and
AMIGS.
Objectives of the scheme:
i. To develop agricultural marketing infrastructure
including horticulture, dairy, poultry, fishery,
livestock and minor forest produce.
ii. To promote innovative and latest technologies
in agricultural marketing infrastructure.
iii. To promote direct marketing.
iv. To promote creation of scientific storage
capacity for storing farm produce, processed farm
produce and agricultural inputs etc.
v. To provide infrastructure facilities for grading,
standardization and quality certification of
agricultural produce.
vi. To promote Integrated Value Chains (confined
upto primary processing stage only) to provide
vertical integration of farmers with primary
processors.
vii. Primary processing means adding value to the
produce without change in its form and may
include washing, sorting, cleaning, grading,
waxing, ripening, packaging, labeling etc.
Eligible Marketing infrastructure:
The activities eligible for financial assistance
under the Scheme are the following:
i. Creation of scientific storage capacity like
godowns, including standalone silos for storage of
food grains with necessary ancillary facilities like
loading, unloading bagging facilities etc.
(Assistance for storage infrastructure will be
available on capital cost of project including cost
of project including cost of allied facilities like
boundary wall, internal roads, internal drainage
system, weighing, grading, packing, quality
testing and certification, fire fighting equipments
etc.)
ii. Cold storages as a part of a permissible
integrated

Quick Success Series: Agriculture Advances
January 15, 2015
value chain prject will also be admissible provided
the cold storage component is not more than 75%
of the Total Financial Outlay.
iii. Creation of Marketing infrastructure upto
primary processing stage like: Cleaning, Cutting,
Depodding, De cortication,Bleaching, Grading,
Sorting, Packing, Labeling, Waxing, Ripening
Chilling, Pasteurization, Homogenization, freezing,
Refrigeration.
iv. Common facilities in the market yard like:
platform for auctioning of the produce, loading,
un loading, assembling, drying, cleaning, grading,
weighing, mechanical handling equipments etc
including ancillary supporting infrastructure
Primary processing in value chain, Functional
infrastructure for collection/ assembling/, drying,
cleaning, grading, standardization, sanitary &
phytosanitary measures, quality certification,
labeling, packaging, ripening chambers, waxing,
value addition (without changing the product
form). For functional infrastructure
v. Equipments for other value addition
(Important: Subsidy for ancillary/ supporting
infrastructure in the project will be restricted to
25% of total permissible subsidy of the project
Stand alone ancillary/ supporting infrastructure
project will not be eligible for subsidy assistance
under the scheme.)
Eligible beneficiaries
Individuals, Group of farmers/ growers,
Registered Farmer Producer Organizations,
Partnership/Proprietorship firms, Companies,
orporations Non Govt. Organizations, Self Help
Groups, Cooperatives, Cooperative Marketing
Federations, Autonomous Bodies of the Govt,
Local Bodies (Excluding Municipal Corporations
for storage infrastructure projects), Panchayats,
State Agencies including State Govt Deptt. And
autonomous
organizations/
State
owned
Corporations such as Agri-produce Market
Committees and Marketing Boards, State
Warehousing Corporations, State Civil Supplies
Corporations etc.
Promoter’s contribution and minimum Term
Loan: Minimum contribution of the promoter:
20% of the project cost.
Minimum Term Loan including subsidy should be
50% of the project cost.

Page
15

Subsidy: Capital cost of the project for the
purpose of subsidy will be calculated on the
project cost as appraised by the Bank/FI or actual
cost of eligible components, as certified by a
Chartered Accountant, whichever is lower.
This is also subject to the subsidy ceiling per MT
and the overall ceiling provided in the following
tables:
Storage & Infrastructure projects:
Category

A) NE
States,
Sikkim, UTs
of
Andaman &
Nicobar &

Rate of
subsidy
(on capital
cost)

33.33%

Subsidy ceiling
Up to
More
1000
than
MT in
1000
Rs./MT MT
and
upto
30000
MT in
Rs./MT
1333.20 1333.20

33.33%

1166.55

1000.00

300.00

25%

875/-

750/-

225.00

Maxim
um
ceiling
(Rs.
Lakhs)

400.00

Lakshadweep

Islands,
hilly*
areas
B) In other
Areas
1. For
Registered
FPOs,
Panchayats,
Women,
SC/ ST
Beneficiari
es or their
cooperative
s**
/Self-help
groups
2. For all
other
categories
of
beneficiaries

Infrastructure projects
infrastructure:
Category

A) N E States,
Sikkim, States of
Uttarakhand,
Himachal
Pradesh, Jammu
& Kashmir, UTs

other

Rate of Subsidy
(on capital cost)

33.33%

than

storage

Maximum
Subsidy
Ceiling (Rs. in
lakhs)
500.00

Quick Success Series: Agriculture Advances
January 15, 2015
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.

of Andaman &
Nicobar and
Lakshadweep
Islands, hilly* areas

B) In Other Areas
1. For registered
FPOs, Women,
SC / ST
beneficiaries and
their cooperative
**

33.33%

500.00

2. For all Other
categories of
beneficiaries

25%

400.00

* Hilly area is a place at an altitude of more
than 1,000 meters above mean sea level.
** SC/ST cooperatives to be certified by the
concerned officer of the State Government.

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 % promoter’s
Contribution (Margin), 50 % Term Loan from
Bank, 25 % back-ended Capital Investment
Subsidy by NHB.
Security: As applicable to Agricultural Term Loans.
Rate of Interest: As per rates applicable to ATLs.
Documentation: As applicable to ATLs.

Page
16

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

Quick Success Series: Agriculture Advances
January 15, 2015
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
Processing Fee: Working capital limits (Fund
Based +Non Fund Based) – For limits above Rs.5

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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.

Quick Success Series: Agriculture Advances
January 15, 2015
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 bank’s
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.
CENTRAL SECTOR SCHEME FOR STRENGTHENING
OF
AGRICULTURAL
MARKETING
INFRASTRUCTURE,
GRADING
AND
STANDARDISTATION (e-cir-316 dt 06.07.2013)
Objective: For development of marketing
infrastructure.
i. Setting up of agricultural markets in private and
cooperative sectors.
ii. Allow direct marketing and
iii. Contract farming and have been permitted to
avail benefits of the scheme
Eligibility: individuals, Group of farmers/ growers/
consumers,Partnership/ Proprietary firms, NonGovernment Organizations (NGOs), Self Help
Groups (SHGs), Companies, Corporations,
Cooperatives, Cooperatives Marketing Federation,
Local bodies, agricultural Produce Market
Committees & Marketing Boards in eligible
States/ UTs.
Pattern of assistance: Credit linked back-ended
subsidy shall be provided on the capital cost of
general or commodity specific infrastructure for
marketing of agricultural commodities and for
strengthening and modernization of existing
agricultural markets, wholesale, rural periodic or
in tribal areas.
Maximum amount of subsidy will be restricted to
Rs.50 lakh (25% of the capital cost) for each
project. In the case of North Eastern States, hilly
and tribal areas and to entrepreneurs belonging
to SC/ ST maximum amount of subsidy will be Rs.
60 lakh (33.33% of capital cost of the project) for
each project. In respect of infrastructure projects
of state Governments, there will be no upper
ceiling on subsidy to be provided under scheme.
Project cost: Project should provide ‘direct’
service delivery to producers/ farming community

Quick Success Series: Agriculture Advances
January 15, 2015
in post harvest management/ marketing of their
produce.
Size of project under scheme should be
determined on basis of economic viability and
commercial considerations.
Cost of land on infrastructure project will be
restricted to ten per cent of the project cost in
rural areas and to twenty per cent in Municipal
areas. Entrepreneur will not alienate land during
period of loan for any purpose other than purpose
for which loan is sanctioned.
Mobile infrastructure for post-harvest operations
(excluding transport equipment) will be eligible
for assistance under scheme.
ROI: As applicable to Ag. advances
Security: The security will be as per norms
prescribed by RBI from time to time.
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

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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.
GSS-DAIRY ENTREPRENEURSHIP DEVELOPMENT
SCHEME (DEDS)
(e-Circular No.358/2014-15 dated 08.07.2014)
The salient features of the scheme are as under:
a) Establishment of Small Diary units of 10
animals
(buffalo
and
crossbred
cows/indigenous) for milk production.
(Unit Cost – Rs.6 lacs for 10 animals –
minimum unit size is 2 animals with an
upper limit of 10 animals)
b) Rearing of Heifer Calves-cross bred,
indigenous descript milch breeds of cattle
and of graded buffaloes- up to 20 calves.
(Unit cost Rs.5.30 lacs for 20 calf unitwith an upper limit of 20 calves)
c) Purchasing of milking machines /
milkotesters / bulk milk cooling units (up
to 5000 liters capacity) (Unit cost Rs.20
lakh)
d) Purchase of Dairy Processing Equipment
for manufacture of indigenous milk
products.(Unit cost Rs.Rs.13.20 lacs)
e) Establishment
of
Diary
product
transportation facilities and cold chain.
(Unit cost 26.50 lacs)
f) Cold storage facilities for milk and milk
products. (Unit cost Rs.33 lacs)
g) Establishment of private veterinary clinics.
(Unit cost Rs.2.60 lacs for mobile clinic &
Rs.2 lacs for stationary clinic)
h) Dairy marketing outlet/ Dairy parlor. (Unit
cost Rs.1 lac)
i) Vermi compost with milch animal unit. (to
be considered with milch animals/ small
dairy farm not separately) (Unit cost
Rs.22,000/-)
j)

Back ended capital subsidy of 25% of the
project cost (33.33% for SC/ST farmers)
will be provided under the DEDS scheme.

Quick Success Series: Agriculture Advances
January 15, 2015
k) Proposals under the scheme shall be
considered on first come-first-serve basis
subject to availability of funds from
Government of India.
The other instructions/guidelines are as follows:
i. Entrepreneur contribution (Margin) of 10% shall
not be required for loans less than Rs.1 lakh or
any other amount as specified in the RBI
guidelines, as revised from time to time.
ii. All the financing banks shall be required to
forward their subsidy claims through their
controlling office to the concerned NABARD
Regional Offices within two months of
disbursement of first installment of the bank
loans.
iii. Financing bank shall adjust the subsidy amount
in Subsidy Reserve Fund Account
of the beneficiary within 7 days of the receipt
from NABARD. In case, it is not adjusted, the bank
shall be liable to compensate the beneficiary to
the extent of the additional interest charged.
iv. Utilization certificate should be submitted by
the financing banks to concerned NABARD
Regional Office within 15 days of the receipt of
subsidy.

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