Priority Sector - Agri and Other priority
Sectors
- At least 40% of the banks advances to be given under
priority sector
- Advances to weaker section should constitute at least
10% of total advances or 25% of priority sector advances
whichever is higher.
- Lending to Agriculture to be atleast 18% of the total
advances. however, lending to indirect agriculture should
not exceed 25% of total agriculture credit target or
18% of the net bank credit.
- Lending under DRI to be at least 1% of the total advance
at the end of the previous financial year.
Segments under Priority Sector
Agriculture
Agricultural Financing
Direct
Short Term
|
Medium Term
|
Indirect
|
Crop Loans
Jewel Loans Agri
Working Capital
For allied activities |
Land development
Minor Irrigation
Farm Mechanisation
Allied Activities
Dairy
Poultry
Piggery
Sheep
Goat
Sericulture
Pisciculture
Beekeeping
Duckery
Biogas |
Fertiliser dealers
Service centres
Godowns
Rural Electrification |
Crop Loans (STPL)
- Medium and Long term loans advances to farmers for
a acquisation for jeep, pickup vans, mini trucks etc.,
to be used for transport of agricultural inputs and
farm products is a priority sector advance
- Allied activities advances granted for grainages under
sericulture
- Indirect finance : Advances upto Rs.25,000/- to farmers
against pledge or hypothecation of agricultural produce
(including warehouse receipts) period of advance not
to exceed 6 months. The amount of Rs.25,000/- is enhanced
to Rs.1 lakh per borrower provided he is banking with
a single bank. Advances upto Rs.5 lakhs granted for
financing distribution of inputs for the allied activities
such as cattle feed, poultry feed etc., is reckoned
as indirect agricultural advance.
- All short term advances to traditional plantations
ie., Tea, Coffee, Rubber, Spices etc., irrespective
of the size of holding will be classified as direct
agricultural advance.
- Advances given to high-tech projects in agricultural
can be classified under agricultural advance.
- Advances for agro-processing and animal vaccine producing
units involving high technology can be classified as
agricultural provided such units produce the required
raw material by themselves for their captive consumption
and do not procure the same for others.
- Financing of farmers for purchase of generator sets
for irrigation purpose may be classified under direct
finance to agricultural. Subject to the refinance eligibility
from NABARD.
- Advances to commission agents in rural and semi urban
areas functioning in markets/mandis, commonly known
as arthias for meeting their working capital for the
credit extended to farmers for supply of inputs may
be treated as priority. Sector under indirect finance
to agriculture.
- Advances extended to dealers in drip irrigation /sprinkler
irrigation system/agricultural machinery will be classified
as indirect finance to agriculture provided.
- The dealer should be located in the rural/semi urban
areas.
- Should maintain separate and distinct record.
- A ceiling of upto Rs.10 lakhs per dealer should be
observed.
Exceptions:
- Loans granted for breeding of racehorses and commercial
dogs.
- Block loans granted for purchase of estates (traditional
plantations)
Top
Agricultural
financing - An over view
i Crop Loans
- Purpose - Purchase of seeds fertilisers, pesticides,
cultivation expenses
- Type of loan - STPC (short Term Production cash credit
) STPL
- Eligibility - Owner cultivator / lease holder
- Appraisal - scale of finance for each district as
decided by technical committee/ DCC
- Repayment - normally tow months after harvest
- Margin - Upto Rs.10000 - nil Others - 15-25%
- Security - Upto Rs.25,000 - Hypothecation of crops
No additional security
- Documentation - application, evidence of property
rights - chitta, adangal ( revenue certificates ) pass
book
- No due certificate from other co-op society / crop
insurance
- Seasonality of crops _ Kharif - South west monsoon
- jun-sep
- Rabi - North East monsoon ( winter)
New Crop Insurance Scheme (Rashtriya krishi
Bhima Yojana - RKBY)
Particulars
|
Comprehensive crop insurance scheme
CCIS
|
New Scheme RKBY
|
Introduced from
|
Kharif 1985
to Kharif 1999 |
01.10.99 |
Crops covered
|
Rice, Wheat,
Millets, Pulses and Oil seeds |
All cereal crops,
coarse grains, Pulses, oil seeds and three cash crops
sugarcane, potato and cotton |
Farmers covered
|
All loanee farmers
|
All loanee farmers
and optional for Non-loanee farmers |
Sum Insured
|
100% of the
loan amount subject to a maximum of Rs.10,000/- (
to be shared by GIC and State Government in the ratio
of 2:1) |
There will be
no restriction on the total sum insured ( to be shared
by GIC and State Government in the ratio of 1:1) |
Premium rate
|
Cereals and Millets - 2% of sum insured
Pulses & Oil seeds - 1% of sum insured
|
Bajra and oil seeds - 3.5% of sum insured
Kharif crops - 2.5% of sum insured
Wheat - 1.5% of sum insured
Rabi crops - 2% sum insured
|
Subsidy in premium
|
50% for SF/MF
( to be contributed by Central and State Govt. equally)
|
50% for SF/MF
( to be contributed by Central and State Govt. equally)
|
Implementing
Organisation |
General Insurance
Corpn of India (GIC) |
While GIC initially
implement the scheme, it will eventually be operated
by a separate organisation called the Rashtriya Krishi
Bima Nigam) |
Settlement of
claims
|
Settlement of
claims is made on the basis of area approach |
Apart from area
approach individual claims of affected farmers will
be entertained separately |
Minor Irrigation:
- PURPOSE: Digging of new wells, deepening of existing
wells, installation of pumpsets, sprinkler irrigation
and drip irrigation.
- SCHEMES: Massive assistance programme for small and
marginal farmers
- Poultry Farming
- 1. Purpose - a. Layer Farming - one day old chicks
- rearing for 5-6 months - 270-280 eggs p.a. culling
of birds at 18 months
- b. Broiler - Fattening for 2 month and selling for
meat
- c. hatchery - Rearing for production of birds
- 2. Breeds
- Layers - Hy line - Ranishaver - Babcock
- Broiler : Uniprow - Samrat - Ross
- Layer & Broiler : White rock - New Hampshire -
Arbington
- 3. Diseases - Fowl pox / Rainket/ Marax
- 4. Types of rearing - Deep litter system - on ground
covered with sawdust / husk space required by bird 2
square feet
- Cage System - space required 0.75 sq.ft, per bird
- 5. Other information : Debeaking is to be done on
7th day or 14th week.
- 1. Feed Age(weeks) Feed
- Chickmash
- Growermash
- Layermash
- 2. Economics
- Capital Investment - Brooder cum grower shed
- Layer shed
- Cost of equipment
Working Capital:
- Birds
- Feed
- Medicines / Vaccine
- Power
- Insurance
- Income : Sale of eggs/litter/gunnies/culled birds
Dairy Farming:
Economic Size
|
2 Animals
animal should be preferably in first lactation
Second animal to be purchased after 5 months
Recovery period to coincide with lactation period
|
Other Information
|
1.Average lactation period - 8-10 months
2. Dry Period - 4-6 months
3. Economic Lactation - 4- 5 months
|
|
B.Deseases
Ringworm,Mastitis, Milk Fever, Rinderpest, Anthrax
|
|
C.Breeds
Indigenous - Sindhi cows, Ongole cows, Murrah
Buffalo,
Mehsana
Exotic Cows Holstein, Jersey, Reddane
|
Farm Mechanisation
- Purpose : Tractors/power tillers/power sprayers/dusters.
- Eligibility : Tractors-Owner cultivator with 8 acres
of perennially irrigated land or 24 acres dry land and
/or as per State Government ceiling act.
- Power tiller-Owner of 6 acres of irrigated land 12
acres of dry land and /or as per State Government Ceiling
act.
- Appraisal:
- Breakeven hours Tractor-1000hrs./Power Tillers-600
hrs.
- Tractor should have commercial test report from CFMIT
- Second tractor loan only after 3 years on full payment(30%margin)
- Repayment period fixed according to crop harvesting
- Comprehensive insurance with bank clause
- Lien should be noted in the RC book
- Margin:15%
- Repayment: Tractor 9 years; Power Tiller
7 years
Biogas
- Biogas is produced from anaerobic fermentation of
organic waste. The gas produced contains around 60%
methane, which is an efficient and versatile fuel.
- Subsidy is available for floating type and fixed dome
Janata type biogas plants, Ganesh models, under national
project on biogas development.
Size of plant Cu.mts
|
No. of cattle
|
No. of family members
|
Kgs. of dung
|
2 |
3-4 |
4 |
30-50 |
3 |
4-6 |
8 |
40-60 |
4 |
6-8 |
10 |
60-80 |
6 |
8-12 |
16 |
80-100 |
8 |
12-15 |
24 |
100-120 |
Appraisal:
- Models:
- (1) KVIC Model (loating type)
(2) Fixed dome (Janata type)
- (3) Ganesh Mode;.
- Applications: Should be routed through KVIC or Block
Office
- Security: (1) Hypothecation of plant upto loan Rs.10,000/-
- (2) Hypothecation of plant and equitable mortgage
for loans above Rs.10000/-. In case of janatha model,
obtaining of term loan agreement is enough.
- D. Repayment : 2-4 cum-7 years; 6 cum above- years.
- E. Classification: If finance given to farmers Direct
Agl.Others SSI.
Financing for Seri-Culture:
- Activities: (a) Mulberry cultivation (b) Silkworm
rearing cocoon production (c) Reeling (d) Weaving.
- Classification: Activities upto cocoon production
is classified under allied activity of agriculture.
Post cocoon activities are classified under SSI.
- Types: Mulberry (Domesticated) Tasar (Forest type
); ERIC (Domesticated) Murga (Forest type)
- Breeds:Univoltine (one cycle in a year); Bivoltine
(two cycles in a year) Multivoltine.
- Stages:
FARM (STPL)
- A) Female Moth Eggs Disease free laying Brushing Hatching
- Or silkworm 400-500 DFLS 6-7 days
- 250-300 per Ha crop
- Mature Moulting Caterpillar Feeding on Larva
- Silkworm
- Transfer to Chandrikas cocoon formation
- Harvesting 5th day
Non-Farm (MTL)
- B) Cocoon Stifling Reeling Twisting Weaving
- (charkhas Cottage (giving tensile
- basins filatures strength)
- 6) Margin:25% Big Farmers. Others subsidy can
be treated as margin, where subsidy is not available
55 margin.
- 7) Repayment: Short Term Loan 12 months; Medium
Term \loan 3-5 years.
Piggery:
- Unit size: 3 SOWS + 1 BOAR
- Breeds: Middle white yorshine, Hampshine: Esser Saddee
back
- Purpose of loan: Purchase of pigs/ construction of
shed water trough/feed trough/cost/medicines/vaccines
cost.
- Repayment: 5-6 annual instalments with 12 months holiday
period.
Sheep & Goat Rearing:
- Unit size: Sheep 20 ewes + 1 Ram
- GoatL3does + 1 buck or 10 does + 1 buck(stall feed
condition)
- Breeds: Sheep Deccani,. Nellore, Bellary, Marwari,
Garhwali, Khasi(Indig)
- Goats: Saane/Alphine Angora(exotic) Deccari/jamnapuri/Bellary(indig)
- Repayment: 5-6 years qrly/half yearly instalments
(12 months holiday)
Bee Keeping (Apiary):
- Purpose: (1) beehives (2) Honey extractor (3) Smoker
(4) gloves and other equipment
- Repayment: 24 months with grace period of 6 months
during off-seaon.
- PISCICULTURE (Fishery)
- Purpose : 1. For inland fishery schemes
- 2. For construction of ponds/nurseries
- For purchasing boats/nets/fish feed/fertilizers, supplementary
feed
- For purchase of vehicles for transportation
- Godowns for storage.
- Varieties: Cattle/Rohn/Mrigal/Silver Carp etc.,
Top
Agricultural
Graduates Employment Scheme (Agrigems)
Objectives
- Lending support to tackle the problem of unemployment/under
employment and also to exploit untapped potentials in
Agriculture sector in one stroke through its self-employment
scheme
'Agrigems' Guidelines:
- Graduates in the age group of 21-45 years in agriculture,
veterinary sciences, horticulture, agricultural engineering,
diary science, fisheries, forestry etc., who are desirous
of being self-employed, with priority for unemployed.
1. Those who have exposure/practical experience
in the line of activity chosen are given preference
2. Owning the land where the entrepreneur
could set up his venture is desirable, though, not compulsory.
Eligible Activities:
- Finance may be provided for any agriculture oriented
productive venture/expertise in rural/semi-urban areas.
1. Rural veterinary clinics.
2. Units of dairy, poultry and other animal
husbandry activities
3. Sericulture, floriculture and other
horticultural crops
4. Setting up of breeding farms, nurseries
etc.,
5. Inland fisheries/fresh water prawn culture
-Ornamental fisheries
6. Mushroom cultivation
7. Seed production
8. Agro processing
9. Trading in fertilisers, animal feeds,
pesticides
10. Agro services centres.
11. Bio-Fertilisers/pesticides.
- Besides, any productive and bankable ventures will
get the financial support from the Bank. But, activities
requiring longer gestation may not be desirable particularly
when they are proposed by unemployed graduates who have
no substantial means for support.
Financial Support:
- need based credit limits not exceeding Rs.10 lakhs
per technocrat
- credit limits may be considered for a group of graduates
desirous of setting up joint ventures. In such cases,
limits not exceeding Rs.10 lakhs per technocrats shall
be considered.
Nature Of Facility:
- Medium term loan or working capital limits or both
depending on the activity and its requirements.
Applicant's Share/Stake:
- 10% of the project outlay
- In respect of innovative projects, which may be decided
by the bank from time to time, margin requirements may
be released based on the merits of individual cases.
- Where project
- Site is owned by the entrepreneur, the cost
- Price of land may be reckoned towards margin.
Interest
- Applicable rate of interest as per Bank rules from
time to time.
Security
- Limits upto Rs.5 lakhs
1. Assets created out of bank loan
2. Third party guarantee acceptable to
the Bank
3. Mortgage or properties, wherever available.
- Limits above Rs.5 lakhs
1. Assets created out of bank loan
2. Third party guarantee acceptable to
the bank
- Mortgage of properties covering atleast 100% of the
loan exceeding Rs.5 lakhs (other than the assets created
out of loan)
Repayment:
- Repayment programme will be decided taking into account,
the income generation economic life of the asset, NABARD
norms, etc.,
- The repayment period will normally be in the range
of 5-7 years.
Training
- Training shall be arranged to the selected candidates
in the respective activities at any one of the institutions
identified by the Bank.
- The cost of training can form part of the project
cost.
Operating Area Of The Scheme:
- Any of the rural or semi-urban branches (urban/metropolitan
branches also, provided the proposed unit is located
in rural/semi-urban areas but within a radius of 25
kms from the financing branch) in the states of Andhra
Pradesh, Tamilnadu, Karnataka, Kerala and UT of Pondicherry.
- ADV 64/95-96 dt:09 08 95 M2 S29
Top
Indian
Bank Kisan Card Scheme
The card name has been changed from Kisan Gold Card to
Indian Bank Kisan Card.
- All existing regular farmer borrowers.
- New farmers whose credit worthiness is satisfactory
as per the assessment of Manager/RDO
- Only individuals are eligible.
Purpose
- To meet the short term credit requirements for cultivation
of seasonal annual and perennial crops based on the
scale of finance.
- The post harvest/house hold requirements of the farmer
at 105 of the limit fixed subject to a maximum of Rs.3000/-
per annum.
Quantum of Loan:
The loan is to be arrived based on the cropping pattern
proposed and the prevailing scale of finance for the crops
proposed. The annual crop loan requirements are broken
into seasonal sub-limit and the Maximum Permissible Limit
(MPL) will be assessed as below:
- Seasonal limit of first season : A
- Seasonal limit of second season : B
- Seasonal limit of third season : C
- Maximum permissible limit: A+B (OR) B+C (OR) C+A whichever
is higher plus 10% of the limit subject to a maximum
of Rs.3000/- for post harvest/house hold requirements.
Plus 20% of crop requirement as contingency to be apportioned
at 10% in II and III year to meet the expected increase
in scale of finance.
Documentation:
- The following documents are to be obtained. Hypothecation
of crops (D68)
- No due/no overdue certificate from co-operative society
(F127) and other financial institutions.
- Due date notice (F147)
- For additional security (wherever is applicable) Third
party guarantee (D57)
- Equitable mortgage (D32/D33/D34/D34-A)
- Registered mortgage (D67)
- Creation of charge as per State Act (D65)
- Affidavit for nil encumbrance on land (D66)
Security:
i.
|
Without tie-up
|
Limit |
Type of security |
Upto Rs.25000/-
|
Hypothecation
of crops |
More than Rs.25000/-and
upto Rs.40000/- |
Hypothecation
of crops, third party guarantee and mortgage of land
|
ii. |
With tie-up
|
Limit |
Type of security
|
Upto Rs.45000/-
|
Hypothecation
of crops |
More than Rs.30000/-
and upto Rs.60000/- |
Hypothecation
of crops, third party guarantee and mortgage of land
|
ii. |
With tie-up
|
Limit |
Type of security
|
Upto Rs.50000/-
|
Hypothecation
of crops |
More than Rs.50000/-
and upto Rs.75000/- |
Hypothecation
of crops, third party guarantee and mortgage of land
|
Nature of account:
- The nature of loan account is akin to cash credit
in the form of running account with annual renewal.
- The rate of interest as applicable to the limit sanctioned
will be charged as per rates prescribed for short term
loans as per RBI directives from time to time.
- On all overdue/ defaulted accounts with limits above
Rs.25000/- penal interest of 2% will be charged on the
over due portion and for the period of overdue to deter
the borrowers from committing default.
Repayment:
- The Seasonal sub-limit for respective seasons should
be adjusted within two months from the date of harvest
of the crop and drawing limit should be accordingly
marked in the cash credit ledger. (CO: Cir.ADV:102/98-99
dt;02 11 1998 M2 S21)
Top
NABARD
- The main aim of NABARD is to promoted integrated rural
development and to secure prosperity of rural areas.
- Established following recommendations of 'CRAFICARD'
(committee appointed by RBI at the instance of Government
of India in 1979).
Sources of Funds:
- Paid up capital, reserves, National rural credit fund,
National rural credit (stabilisation) fund, deposits,
market borrowings and borrowings from Government of
India and RBI.
- Provides refinance against eligible term loans both
in farm and Non-Farm sector.
- Refinance is available through ARS/SR.
Automatic Refinance Scheme (ARS):
- No permission from NABARD is necessary for IRDP, Biogas,
Farm Mechanisation, SC/ST action plan categories.
Schematic lending (SR):
- Bank to formulate the scheme and get prior approval
from NABARD.
- Schemes of Land Development, Allied Activities, Rural
Electrification and Minor Irrigation will come under
this category.
- Refinance is available for all loans under agricultural
and allied activities.
- Loans under DRI are not eligible.
Farm Sector:
- Minimum period of loan: 3 years and maximum period
of 15 years and in special cases upto 25 years.
- Promoter's contribution (margin)
- Small Farmers : Minimum of 5%
- Medium farmers : Minimum of 10% (7% for 2 or more
farmers in group loans)
- Others : 15% (10% for group loans)
- Others (for pumpsets
- Under minor irrigation): 10% - individuals 20% - corporate
bodies
Extent of Refinance:
S.No.
|
Quantum of refinance (Purpose)
|
%
|
1. |
Automatic Refinance
facility |
|
a. |
Traditional
activities
Dairy, Sheep, Goat, Piggery, Poultry, Inland Fisheries,
Excepting Brackish water pond, Poultry Units, Plantation,
Horticulture |
70 |
b. |
Work Bullocks,
Bullock Carts, Animal Driven Carts, Bio-gas |
70 |
c. |
Minor Irrigation
|
90 |
2. |
Project lending
|
|
|
I) MI |
90 |
|
II) Work Bullock,
Bullock carts, Animal Driven Carts |
70 |
|
III) Schemes-
other than above |
70 |
3. |
Farm Mechanisation
(including combined harvesters) |
70 |
4. |
SC/ST Action
Plan, ARWIND |
100 |
5. |
SHG |
100 |
6. |
IRDP |
70 |
|
I) MI |
70 |
|
II) Work Bullock,
Bullock carts |
70 |
|
Bio-gas |
|
7. |
Non-Farm Sector
|
|
|
I) Drip District
|
100 |
|
II) Non-Drip
Districts |
90 |
8. |
Externally aided
project (WB assisted project) |
90 |
9. |
Waste land development
where individuals are beneficiaries |
|
A. |
i) Nursery Schemes,
ii) Farm Forestry iii)Tree Patta scheme |
100 |
B. |
Dry Land development
|
100 |
C. |
Forestry programme
sanctioned to various corporations/corporates |
70 |
Rates of interest
on refinance with effect from 1.2.99 |
Upto Rs.25,000/-
|
8.5% |
Rs.25,000- Rs.2
lakhs |
10% |
Rs.2 lakhs and
above |
11% |
SHG |
6.5% |
Rates of interest
on minor irrigation other than Drip |
Upto Rs.25,000/-
|
8.5% |
Above Rs.25,000/-
|
8.5% |
Rates of interest
for ultimate borrowers |
Upto Rs.25,000/-
|
12% |
Rs.25,000/-Rs.2
lakhs |
Not to exceed
13.5% |
Rs.2 lakhs and
above |
As decided by
bank |
Ceilings for
ARF (per individual borrower) |
(Rs. In lakhs)
|
Sector |
Maximum project
outlay |
Max.refinance
per individual |
Farm sector
|
Rs. 25 lakhs
|
Rs.15 lakhs
|
Non-farm sector
|
|
|
A. Composite
loans |
- |
Rs.2 lakhs |
B. Integrated
Loans |
No upper limit
(investment in P&M not to exceed limit of Tiny
industry Rs.25 lakhs at present) |
Rs. 15 lakhs
|
SRTO
- Scope enlarged, loan assistance for public goods/passenger
transport vehicles including LMV and autorickshaws having
GVW upto 16.2 tonnes eligible for refinance support.
- RRBs are permitted to finance upto 2 vehicles to the
non-target group borrower and 1 vehicle to target group
borrowers.
- Advances made to clinics, nursing homes, pathology/radiology
labs, including acquisition of medical equipment, set
up in rural areas by professionally qualified self employed
medical practitioners as eligible activities under NABARD.
- Refinance/Service sector. The interest on bank loans
and refinance should not exceed the ceiling fixed under
composite and integrated loan scheme.
- NABARD will extend the scope of SRTO schemes so as
to cover acquisition of goods transport/tripper vehicles
having GVW upto 16.2 tonnes under ARS.
- Margin 15% of the cost of the vehicles by the borrower.
- Refinance will be restricted to financing of 2 vehicles
subject to a ceiling of 10 lakhs per borrower. Borrowers
owning one vehicle will be eligible for one more vehicle.
Repayment period is 5 years with a moratorium period
of 6 months. It should be registered as a public carrier.
Criteria for NABARD Refenance:
- Year Cut off point for recovery % for unrestricted
refinance
- 65%
- 70%
- 75%
- Refinance is to be claimed through the respective
Regional Offices in our Bank.
- Loans covered under ARS; IRDP, SC/ST action plan,
Bio-gas, Farm mechanisation, non-farm sector.
- Eligibility for drawal of refinance is linked to DCB
position (recoveries) in the case of farm sector.
- Applications for drawal of refinance of should be
submitted on a monthly basis. If the applications are
submitted on a monthly, the amount of refinance claimed
should not be less than Rs 2 lakhs under each such drawal
application.
- Refinance payment: 8 years for minor irrigation loans
(and 4 years for others). However, banks should fix
repayment to borrowers as stipulated by 'NABARD' in
half-yearly instalments.
- All assets acquired by the beneficiaries should be
adequately insured.
- The loans extended to borrowers should be as per unit
cost norms prescribed by NABARD.
- NABARD has allowed banks to charge a once for all
evaluation fee of 0.5% of the cost of investment from
the borrowers for meeting appraisal and processing charges
of loan applications.
- Refinance sanctioned should be drawn as per sanction.
Otherwise, commitment charges at 1/3% p.a on the shortfall
as at the end of the year should be paid to NABARD.
Areif: NABARD Refinance-Agricultural and Rural
Enterprise Incubation Fund:
- To enable voluntary agencies/non governmental organisation
supporting rural enterprise to avail of bank credit,
a special fund AREIF is set up with a purpose of Rs.
5 crores. Assistance in the form of refinance issue
of guarantees will be available.
- Refinance to the banks will be provided from the fund
for innovative schemes for farm/non-farm sector where
commercial viability has not been established and where
the project required support of flexible terms. For
VAs/NGOs providing linkage support for rural NFs and
having a good track record NABARD has decided to give
selectively guarantee to the banks in lieu of collateral
security. Application has to be made to OIC, RON/NABARD,
alongwith details of project innovativeness, technological
and commercial risks involved, banks assessment etc.
- Max Loan - Rs. 10 lakhs
- Refinance - 100% on farm and non-farm sector
- Grace period - Case by case
- Repayment - Max. 15 years
- Promoters - 10% of PC
- Interest - as per NABARD norms
- Security - Hypothecation/Other security
- For guarantee Organisation is legal entity,
working in rural areas for 3 years no discrimination
on the basis of religious caste etc. not active in any
political party, professional management etc. are necessary.
- NABARD refinance will be available for farm mechanisation
programme.
- Small tractors below 18 P.T.O. HP capacity, below
6 acres of irrigated land.
- Repayment in 12 years (as against 9 years).
- Subsidy 30% or Rs.30000 per small tractor and three
implements including a trailer.
- Margin 15% over and above subsidy available
- Scope for custom hire incremental income etc. to be
taken into account.
- The NABARD has revised its refinance rate structure
for commercial banks, RRBs and the State Co-operative
Banks. This revision has been done considering the upward
movement in the prime lending rate of financial institutions
and commercial banks. In case of advances, over Rs.
2 lakhs the refinance rate will be 3% below the rate
charged by the bank.
- It may be recalled that NABARD has moved to floating
rate regime in case of refinance rates for advances
in this category, sometime last year. The refinanced
rate was then pegged at 4% below the rate charged by
the bank.
- The apex bank has also rationalised the quantum of
refinance. Henceforth, NABARD refinance will be available
uniformly for 50% of the land extended by the bank.
Hitherto, the quantum of refinance ranged between 50%
and 100% depending upon the purpose, region and class
of the beneficiaries. However, an exception has; been
made in case of loans under the SC/ST action plan. Where
100% refinance will be available. Also, in case of externally
aided projects such as the national seeds project, the
apex banks has indicated that the existing percentage
of refinance as specified in the relative agreements
and as indicated in the sanction letter will continue
to apply.
- NABARD has also made a minor revision in its refinance
rates for RRBs and state cooperative banks. The quantum
of refinance extended to these banks has also been rationalised
at 80% of the bank loam.
- Earlier the quantum of refinance provided by NABARD
to RRBs ranged from 75-100% However, as an exception,
for farm mechanisation and for work animals and animal
driven carts schemes, the quantum of refinance will
be 60%of the bank loan.
Top
Educational
Loan Scheme for Computer Courses with Placement Assurance
Eligibility:
- Fresh Graduates or Post-graduates in any discipline.
Age:
- Not exceeding 25 years (relaxable by 5 years for SC/STs)
Income Eligibility:
- Family income should not exceed Rs.15000/- per month.
Course of study:
- Job oriented full time/part time courses in basic,
Cobol, Fortran, c, Pascal, word processing, lotus 1-2-3,
dbase III plus, training courses for O,A,B, and C level
of the DOEACC syllabus or any other course in computer
science applications, conducted by accredited institutions
agencies approved/to be approved by the bank, for total
duration not exceeding 18 months, to be followed with
regular assignment/ employment.
Amount of Loan:
- Schedule of fees prescribed by the institute or three
times of assured minimum salary whichever is less subject
to a maximum of Rs.25000/- to be disbursed as a term
loan.
Rate of Interest:
- Upto and inclusive of Rs.25,000/- 12.5%.
Loan limits:
- Upto Rs.6,500/- under DRI norms 4.25%
Margin:
- Depend upon the cost of study and loan eligibility.
Disbursement: Direct to the Institute.
Insurance:
- Can be waived upto Rs.10,000 above Rs.10,000 - LIC
policy for face value upto the loan amount.
Repayment:
- 24 to 30 equal monthly instalments commencing from
the calendar month, succeeding, the completion of training
payable by the student. Periodical interest to be recovered
from parent/guardian.
Sanctioning authority:
Top
Loan
Scheme for Computer Courses to Salaried Class of Persons
And / Or their Sons/Daughters Against Check-Off Facility
Eligibility:
- Confirmed/permanent employees of Government/semi Government/Public
Sector/Reputed Private Sector undertakings willing to
extend check-off facility and/or their sons/daughters
who have passed +2 examination and above with atleast
60% marks in all subjects.
Income Eligibility:
- Family income should not exceed Rs.15,000/- p.m.
Course of study:
- Job-oriented full time/part time courses in basic,
Cobol, Fortran etc. courses in computer science/applications
conducted by accredited institutions agencies approved/to
be approved by the Bank, for total duration not exceeding
18 months.
Amount of Loan:
- As per schedule of fees prescribed by institution/agency
for the course or three months gross salary or 25,000
whichever is less, subject to the take home pay being
not less than 40% of gross pay, after providing for
loan instalment.
Rate of Interest:
- Upto and inclusive of Rs. 25,000 - 12.5%
Margin:
- Variable in individual cases, depending upon cot of
study and loan eligible.
Disbursement:
- Course fees will be directly remitted to computer
institute/agency.
Insurance:
- Insurance can be waived for loans upto Rs.10,000/-
for loans exceeding Rs.10,000 LIC policy for face value
not less then the loan amount to be taken in students
name and assigned in banks favour.
Repayment:
- Repayable in 24 to 30 monthly equal instalments commencing
from the calendar month succeeding the date of disbursement
besides periodical interest.
Securities:
- DPN, Educational Term Loan Agreement, Irrevocable
letter of authority by salaried person to his employer
for deduction and remittance for instalment to bank,
from monthly salary.
- Under taking by employer for deduction from salary
and remittance to bank.
- Undertaking by employer for deduction from salary
and remittance to bank.
- Undertaking by salaried person to repay quarterly
interest as and when debited and LIC premium until liquidation
of entire dues.
Sanctioning authority
Top
Consumption
Pure consumption loans granted to borrowers
belonging to weaker sections as per ceiling listed below
(Rs.)
General Consumption |
150 |
Medical Expenses
|
500 |
Marriage Expenses
|
500 |
Educational
Needs |
200 |
Others |
150 |
- Total finance for 2 or more purposes should not exceed
Rs.1000\- per family
Margin Requirements:
Agricultural Loans (Both MTL/STPLS)
|
(a) Limits upto
Rs.15,000/- |
No margin |
(b) For others
|
- |
(c) IRDP/DRP/SEEUY/SUME
etc |
- |
Where subsidy
is available |
NIL |
Other Priority
Sectors: (a)Limit upto Rs.25,000/- (b)Limits Exceeding
Rs.25,000/- (c)Housing loans upto Rs.5000/- SC/ST/EWS
|
NIL 15% to
25% 20% of cost of construction If labour is contributed
by borrowers himself, such contribution can be treated
as margin. |
Top
Housing Finance:
Direct Finance:
- Loans upto Rs.5 (as per latest credit policy) lakhs
for construction of House granted to all categories
of borrowers in rural areas and Rs.10 lakhs in Urban/Metropolitan
area.
- Loans upto Rs.50,000/- for repairs to damaged houses
granted.
Indirect Finanace
- Advances to any Government agency for construction
of Houses where the loan component does not exceed Rs.5
lakhs per housing unit.
- Assistance given to any government agency for slum
clearance and rehabilitation of slum dwellers where
loan component does not exceed Rs.5 lakhs per housing
unit.
Top
Non-Farm
Sector (Nabard)
- Refinance is available from 'NABARD' in respect of
loans granted to small, tiny village and cottage industries
in rural areas.
- Refinance is also available against loans granted
to small scale service establishment and general support
activities like restaurants, Xeroxing debase, typing
activities etc. purely trading or business activities
are however not eligible.
- Both the above types are covered under automatic refinance
facility (ARF).
- Integrated term loans upto Rs.10 lakhs (including
working capital for one operating cycle) are covered
under 'ARF'.
- 70% refinance is available under 'ARF'.
- Refinance availability to non-farm sector loans is
not linked to overdue position.
- Project outlay for the schemes covered under 'ARF'
normally should not exceed Rs.15 lakhs.
- Except in the case of Artisans, the units should be
located in areas where population does not exceed 50,ooo.
- Composite loans upto Rs.50,000/- are covered under
'ARF'.
- For artisans, loans upto Rs.12,500 for construction
of sheds are eligible for refinance.
- Rate of interest : As per loan size(on loan)
- Refinance to be drawn within 12 months from the date
of first disbursal of loan.
- Margins to be stipulated (minimum level)
- Composite loans : NIL
- SSI units Loans upto Rs. 1 lakh : 5% of project
cost
- Loans above Rs.1 lakh - 10% of project cost
- Indirect finance to SSI : 10% of project cost
- Project formulation and consultancy : 10% of project
cost.
- Fees incurred by the borrowers (Refinance available
upto Rs.10,000/-)
- 'Agro-Industries Projects' are covered under Normal
schemes
Some Special Schemes:
Financing of Mobile Sales Vans:
- Not exceeding 2 sales vans can be financed. The loans
including working capital for one operating cycle should
not exceed Rs.10 .00 lakhs and project cost not to exceed
Rs.15.00 lakhs.
- 100% refinance is valuable.
- Margin:5% for loans upto Rs.1lakh and 10% thereafter.
- Repayment: Max:7yrs, Min:3 years.
- The unit may be located anywhere but mainly rural
non-farms products should be marketed by these units.
Financing Mobile/Static Carts/Kiosks:
- Cost of purchase, lease or construction of a mobile/static
cart/kiosk can be financed.
- Loan should not exceed Rs.50,000/- 70% refinance is
available.
Minimum Margin:
Repayment:
- Max. 10 years Min. 3 years.
Ancillary Units:
- Decentralised sector ancillary units (not above SSI
level) can be assisted upto Rs.50,000/- by way of composite
loans, or upto Rs.10.00 lakhs under integrated loan
scheme under 'ARF'.
- Mother units are eligible for incentive from 'NABARD'
on a selective basis against approved expenses either
wholly or partly depending upon the case.
- The approved expenditure should be related to:
- Training for transfer of technology/know-how, upgradation
of skills etc.
- Design development, drawings and quality control/testing
- Salary for one or two professionals, for 3 to 5 years,
for organising and supervising satellite units.
- Compensation for a limited period not exceeding 5
years towards extra expenses incurred for transporting
goods to and from the far flung rural based satellite
units.
- Agro Industries: NABARD refinance is available in
respect of loans granted to Agro-processing industries
on a schematic basis irrespective of their
- Margin:25% of project cost; Debt equity ratio 3:1.
- Extent of refinance is subject to overdue norms as
in farm sector.
- Max-repayment period: 10 years.
SRTOS:
- Borrower must reside in rural areas and the vehicle
should be used for transport of rural farm/industrial
products only. Pay load of the vehicle should not exceed
1 tonne.
- For LCVs and GVW can be upto 6 tons instead of 3 tons
earlier.
- LCV=Light Commercial vehicle.
- GVW=Gross vehicle weight.
- Only new vehicles are to be financed and maximum number
of vehicles permitted is 2 only.
- The loan is covered under automatic refinance facility.
- 70% refinance is available from 01.04.97.
- Maximum repayment period: 5 years.
- Margin: 15% of the cost of the vehicle.
- Units not covered under the existing schemes of NABARD
- Can be covered on a project basis selectively
- Unit must be located in a rural area (population not
exceeding 10,000)
- Refinance is available for modernisation also
- Extent of refinance:70% margin: 25% of project cost:
repayment Max. 10 years
- Soft loans assistance for margin money extended upto
a maximum of 15% of project cost is also eligible for
100 % refinance free of interest. Banks can levy 1%
to borrowers as service charges.
- Soft Loans Assistance to Wards Margin Money:
- Available for all the schemes under non-farm sector
as also high tech projects export-oriented units and
agro processing projects covered under farm sector.
- The loan will be restricted to:
- Actual shortfall in promoter's contribution
- or
- Rs.75,000/- (for units covered under 'ARF') and Rs.5
lakhs (all other schemes not covered under 'ARF') whichever
is less.
- Banks can sanction and release the soft loan to eligible
borrowers covered under 'ARF' prior sanction for 'NABARD'
is necessary.
- Soft loan is interest free.
- Service charge of 1% p.a. can be collected from the
borrowers
- Soft loan should be recovered along with the term
loan in suitable instalments as per the relevant schemes
- Refinance available:70%
- With a view to supporting risky but potentially viable
rural innovative ventures and also to enable voluntary
agencies/non-governmental organisations, supporting
rural enterprises to avail of bank credit, NABARD has
set up special fund to be known as Agriculture and rural
enterprise incubation fund (AREEIF) with a corpus of
Rs.5 crores.
- The environment friendly projects like wasteland development,
rainfed farming on watershed basis, etc. are eligible
for 100% refinance support from NABARD.
- NABARD refinance for handloom/powerloom/ handicrafts:
- (Investment credit ARF:
- Composite loan scheme: Refinance for loan upto Rs.50,000/-
per borrower for financing block capital or working
capital.
- Integrated loan Scheme: Maximum Refinance upto Rs.10
lakhs per unit with project outlay upto Rs.20 lakhs
for commercial banks and Rs.15 lakhs for others. Schemes
beyond ARF limit and upto SSI limit are eligible for
refinance.
Schemes for Handloom sector:
- Loans sanctioned for modernisation/acquisition of
looms and construction of work sheds.
- Opening/renovation of marketing outlets.
- Opening/renovation of emporia.
Schemes for powerlooms:
- Financial assistance for acquisition of powerloom
by individual/societies.
- Modernisation of powerlooms/GOI schemes formulated
by MANTRA (Man made Textile Research Association).
- Assistance to banks for financing acquisition of old
powerlooms for NTC by the workers of NTC opting for
VRS.
Other Schemes:
- Assisting for setting up of units upto SSI limits
to industrial co-operatives
- Financing for mulberry and non-mulberry under sericulture.
Recent Policy Initiative by Nabard to Promote
non-Farm Sector:
- Scope of automatic refinances facility is enhanced
from Rs.7.5 lakhs to Rs.10 lakhs
- Ceiling for integrated loan scheme enhanced from Rs.7.5
lakhs to Rs.10 lakhs. The project outlay has also been
enhanced from Rs.8.5 lakhs to Rs.15.00 lakhs.
- Scope of small road transport operators is enlarged
to cover light commercial vehicles (LCVs) whose gross
vehicle weight (GVW) does not exceed 6 times (jeeps
are not covered)
- Formation of Agriculture and Rural Enterprises Incubation
Fund (ARIEF) to support risky but potentially viable
rural innovative ventures and also to enable voluntary
agencies/non-governmental organisation supporting rural
enterprises to avail bank credit.
- The IDBI has introduced a variable interest rate system
for lending in addition to the fixed interest system.
The new interest rate would be on the basis of percentage
points over the long term prime lending rate (LTPR)
which will be determined periodically. The IDBI has
widened the scope of the existing venture capital fund
scheme by including wider spectrum of projects which
are not necessarily technology driven and providing
wider rage of financing packages.
- Ordinarily assistance under the scheme will be available
to ventures with project cost of Rs.5 crores. However,
in deserving cases ventures costing above Rs.5 crores
will be considered for assistance on merits. Assistance
under the scheme will be available for financing cost
of fixed assets, operating and market development expenditure
and start up working capital, and selecting for core
current assets, during commercial operations.
- Refinance Assistance extended by IDBI on the term
loans granted by banks to industrial units (Non-SSI):
- IDBI will provide refinance assistance only in respect
of term loans extended by banks to industrial units
located in backward states like Orissa, Bihar, Jammu
and Kashmir, North Eastern States and Himachal Pradesh.
Top
Ind
Bank Housing Ltd.
Joint venture of Indian Bank and HUDCO. Incorporated on
28.1.91 Registered Office: Madras Functioning 13 branches
including one in Hyderabad, Vizag. Helps build happy homes
is the slogan
Aim:
To help the borrowers to build own dwelling on liberalised
assistance on condition of his income and repayment capacity.
To extend loans/assistance for renovation/upgradation
including major repairs.
Eligibility:
Individuals, groups of individuals or members of co-operative
societies including NRIs are eligible for housing loans.
Any individual who does not own a dwelling unit is ALONE
eligible. If salaried, the applicant should have put in
a minimum service of 3 years.
Purpose:
To finance the construction of house/flat or one under
construction. To buy an existing house or flat which is
not older than 15 years. No loan is available for purchase
site alone or for repayment of existing housing loans
or non-dwelling units.
Quantum:
Depends on repaying capacity Minimum Rs.7500/- :Maximum
Rs. 10 lakhs For upgradation/major repairs - Rs. 1,50,000/-
Margins:
RESIDENTS NON RESIDENTS Upto Rs.50000/- 15% for any amount
the Rs.50001/- to Rs.1 lakh 20% margin is 40% Above Rs.1
lakh ` 25%
Period of Loan:
Minimum 3 years:
- Maximum 20 years Minimum 5 years; Max 10 years
Insurance
- The property should be insured against fire and other
hazards.
Deposit Schemes:
Shree-Nivas Deposit (Snd) Fixed Deposit Scheme:
- Minimum deposit: Rs.1000/-; interest: as announced
by IBHL from time to time
Ind-House Money Multiplier Deposit (Ihmmd):
- Minimum amount Rs.1000/-
- Minimum period 13 months to maximum 84 months
Recurring Deposit:
- Minimum monthly deposit of Rs.100/- and multiples
of Rs. 50/- thereof. persons in different states in
India, it must bear the stamp duty of that state where
it is signed first. It is then to be sent to the second
state for the signature of the other person. If in that
state, the duty on the document is higher than in the
first state, the excess amount will have to be paid
before the person in the second state signs it. The
document should be sent to stamp office along with the
amount of deficit stamp duty where it is certified.
- If the document is signed in one state and is to be
acted upon in another state where the duty is higher,
the deficit amount of stamp duty is to be paid in the
state where it is to be acted upon within 3 months of
its receipt in the latter state.
Loan to pensioners
- Limit will be Rs.10,000 or 3 months pension whichever
is less.
- Funds clearance is not required and pension loans
can be considered by branches themselves as per the
guidelines irrespective of their NPA level.
- Gupta Committee Recommendations - Cash disbursements
for agricultural loans The revised guidelines are as
under.
1.In respect of STPL, loan
should be disbursed in two instalments in cash. The
second instalment may
be released after ensuring the end use of first instalment.
2.In respect of MTL for purchase
of machinery, cash disbursement upto Rs.10,000 may
be made through
the SB account of the borrower. Where the amount exceeds
Rs.10,000, payment shall be made
directly to the suppliers as per the usual norms.
3.For other MTLs such as land
development, digging of well, etc. disbursement can
be made in cash in
stages based on the progress of work.
- Sanction of advances in respect of accounts/group
accounts where concession by way of waiver or/and write-off
has been extended
- The existing guidelines on the above subject stand
modified as follows:
1.For review/renewal or increase
in limits, the proposals should be submitted to Management
Committee
as a one time measure.
2.Subsequent to sanction by
MC,
a. Further
review/renewal or increase in limits upto 25% of
sanctioned limits without any change in
sanction terms relating to security can be done
by the appropriate sanctioning authority. If change
in sanction terms for security is envisaged, the
same should be referred to MC.
b. Further
increase in limits (Fund Based and Non-Fund based)
in excess of 25% of sanctioned limits
with or without change in sanction terms relating
to security can be done only by MC.
Indian Bank consumer loan scheme:
- The scheme comes into effect from 1.11.98. The salient
features are as follows:
1.Any customer whether existing
or new, properly introduced with impeccable credentials
whose salary/income/
earnings is routed through his account.
2.The articles eligible for
purchase include consumer durables, white goods and
vehicles.
3.For salaried class the minimum
loan shall be Rs.10,000 and the maximum loan shall
be five times the
monthly take home salary or Rs.25,000 whichever is
less for purchase of white goods. for 2 wheelers
and 4 wheelers, the eligible amount will be 5 times
the monthly gross salary or Rs.3 lakhs whichever
is less.
4.For professionals and others
the maximum loan amount is limited to Rs.25,000 for
consumer durable
and white goods, and Rs.3 lakhs for 2 wheelers and
4 wheelers.
5.A minimum of 25% margin
shall be held.
6.The rate of interest shall
be PLR + 4% + Interest tax.
7.Front end service charge
of 1% on the advance amount besides processing charges
8.Repayment in 60 EMI for
4 wheelers and 36 EMI in other cases.
9.For non-salaried class,
post dated cheques for monthly instalments covering
repayment period should
be obtained.
10. Hypothecation of the articles purchased
to be obtained as security.
Kisan Gold Card Scheme modified as Indian
Bank Kisan Card
- The improvements over the Kisan Gold Card Scheme are
as under:
1.Limit fixed for 3 years
and renewed/ reviewed every year in order to ensure
meeting the timely credit needs
of the farmers.
2.One time documentation and
simplified system of renewal
3.Any number of credits/debits
allowed
4.Inclusion of post harvest/household
requirements at 10% of crop cultivation expenses subject
to a maximum
of Rs.3,000 besides contingency provision of 20% of
the card limit to meet escalation in cultivation
cost.
5.In the case of crop being
affected by natural calamities, the loan amount could
be rescheduled/ rephased
as term loan and the farmer could operate the account
as per the seasonal sub-limits already
fixed.
6.Sanction of jewel loans
under non-priority/non-agriculture category It has
been decided that non- priority/non-agriculture
jewel loan can be introduced in all metropolitan and
urban branches subject to
the availability of requisite infrastructure. Authorisation
for introduction of the jewel loan in metro/urban
branches and branchwise allocation of limits will
be done by ZMs. The salient features of
jewel loans for non-agriculture purpose include the
following:
Amount |
Maximum Rs.50,000
per borrower. While there will be no minimum for rural
and semi-urban branches, for metro/urban branches
a minimum of Rs.5000 per borrower is prescribed. |
Advance rate |
Rs.260/- per
gram on 22 ct. jewels or 70% of the market value whichever
is less |
Rate of interest |
PLR + 4% + Interest
tax |
Period |
Maximum of 1
year |
Appraiser fee |
25 paise to
30 paise per Rs.100 of the loan amount with a minimum
of Rs.2.50 |
- Irrespective of the scale of the branch, BMs can exercise
discretionary powers upto Rs.50000.
- Recommendations of Kapur Committee The 14 points requiring
immediate steps/ensuring implementation are
i. Compliance of Nayak
Committee recommendations and 7 point action plan.
ii.Use of prescribed loan
application form
iii. Scrutiny of filled in application
forms vis-a-vis check list
iv.Extending assistance to
the applicants in filling up of applications.
v. Assessment of working
capital requirements to SSI borrowers where fund based
limits exceed Rs.4
crores (STBC method)
vi.Posting of Technically
oriented direct recruits in specialised SSI branches
(all SSI branches in our bank
are posted with an IDO)
vii. Delegation of enhanced powers
to specialised SSI Branches
viii. Entertaining SSI proposals of loan
limit of less than Rs.5 lakhs (Sub sectoral allocation
had already been
communicated
ix.Disposal of applications
- within a fortnight for credit limit upto Rs.25000
and within 8 to 9 weeks in other
cases.
x. Finer rate of interest
(Credit Rating system is already introduced)
xi.Working skills of BMs/Officers/staff
dealing with SSI sector and specialised SSI branches
(branches can
take up the training requirements with their respective
Zonal Office/HO:SIFD).
xii. Machinery to look into complaints
(already in place - branches/controlling offices are
required to reactivate
the machinery available)
xiii. Procedure for making complaints (Systems
are already in place)
- Discretionary powers for sanction of advances by a
committee of CM and IDO at specialised SSI Branches
- A committee consisting of the CM and IDO of specialised
SSI branch should be formed with immediate effect. The
facilitywise discretionary powers vested in the above
committee for various credit limits are given in the
annexure to the circular. The specialised SSI branch
should consider high value credit proposals of Rs.25
lakhs and above only.
- Bank advances to retail traders under priority sector
- RBI has advised that the present ceiling of bank advances
under priority sector to retail traders is increased
from Rs.2 lakhs to Rs.5 lakhs.
- Advance against D-mat shares
- The ceiling per borrower is Rs.20 lakhs
- The minimum margin is 25%.
- Priority Sector Advances - Credit deployment to SSI
sector
- The ceiling on investment in plant and machinery of
tiny enterprises/unit and small scale service/business
enterprises (SSSBEs) increased Rs.25 lakhs
- Fast Track - Quicker Assessment and sanction of credit
facilities
- Fast track system for quicker assessment and sanction
of credit facilities has been introduced as a strategy
of marketing for standard corporate accounts. The eligibility
criteria include,
a.Accounts of Public Limited
Companies which are standard asset as on 31.3.97 and
with fund based
and non-fund based limit of Rs.5 Crore and above
b.Accounts in specialised/designated
branches which report directly to Zonal Office.
- Accounts under Fast Track will be brought under joint
appraisal by branch, Zonal Office and Head Office in
case of Chennai Zone and by branch and Zonal Office
in other Zones. In any case, the joint appraisal shall
be initiated by ZM and completed and sent to the credit
desk, at HO within 15 days of receipt of the applications
at the branch in a cover marked 'Under Fast Track System'.
In case of Zones other than Chennai, before commencing
joint appraisal, a copy of the proposal shall be sent
to Head office.
- The approach would be to avoid repetition of data/observation
already covered by ZO. The over all time frame for decision
taking will be 30 days. The joint appraisal team shall
include (i) Branch Manager, (ii) AGM (Credit) at Zonal
Office (and desk officer of Head Office for Chennai
Zone). Party shall be called for discussion to get additional
information / details, if any.
- At Head Office, the proposals will be placed simultaneously
for funds clearance. For the purpose of handling such
proposals, it is proposed to have a Corporate Banking
Division at HO.
- As part of Fast Track System, proposals may be taken
up for consideration without latest audited balance
sheet subject to the eligibility criteria as given below:
a.Minimum current ratio of
1.33 consistently for last 3 years
b.Record of net profit after
tax for last 3 years
c.Account to be serviced at
designated/specialised branch
d.'A' Grade rating as per
the revised credit rating parameters. (Standard assets
to be considered till new
credit rating system stabilises) The Fast Track System
comes into force with immediate effect.
Top
Loans
Against Gold Jewels for Agricultural Purpose:
1.Advance against primary gold
is prohibited
2.Jewel should not bear any initial
other than that of the borrower.
3.Quantum of loan should be as
per scale of finance or Rs.50000/- per borrower whichever
is lower. Non-priority
Rs.50000 maximum.
4.Evidence of agricultural occupation
viz., revenue records, tax receipts to be obtained
5.Jewel should not be of less
than 22 carats gold.
6.Repayable within 2 months from
date of harvest. Interest is added only on due date
7.Jewel loan should not be kept
unadjusted beyond 24 months thereafter auction can be
held with due notice.
8.Advance value per gram is calculated
based on circular from CO (presently 70% of market value
or Rs.260/-
per gram whichever is lower), for loans granted to agricultural
as well as non-agricultural purpose.
The jewel loan against pledge of gold ornaments for agricultural
purpose can be sanctioned by
the branch manager upto the MDL even if the borrower enjoys
other limits sanctioned by GK/ADB loan
committee or other higher sanctioning authorities. Jewel
loan for purpose of medical/education and
repair of own house property of staff can be permitted
by ZO/CO. Overdues under jewel loans category
should be brought down to 3% of outstanding and there
should not be any jewel loan account outstanding
for more than 24 months. Dispensing with DPNs for Jewel
Loans: Our HO has decided to dispense
with the obtention of DPN (D1/D2) for jewel loans. The
jewel loan application form (F-120) has been
modified to this effect.
9.It can be granted for medium
term upto 30 months.
10. Repayable Monthly/qrtly/hly. Instalments
Adv:L55/95-96 dt:27 07 95 M2 S21
Loan Against Gold Ornaments for Medium Term
Purposes:
- For purchase of milch animals, bullocks, farm implements,
plant protection equipments, maintenance of irrigation
systems, maintenance of orchard crops etc.,
- Quantum: Should not exceed the unit cost or 70% of
the net market value of gold or advance value at Rs.260/-
per gram., whichever is less. Rate of
- Interest: As per CO:CPGD circular from time to time.
Repayment: Repayable in 30 months from the date of sanction
in Mly/Qly/Hly instalments.
- If no repayment is coming within 24 months, steps
should be taken to recover the loan before 30 months
by auctioning the jewels.
- Procedure: Landbased activities; Chitta and Adangal
or equal land records.
- Others: Invoice/quotations etc.,
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Jewel
Loan for non-Agricultural Purposes
Branch managers can sanction upto Rs.50000 (irrespective
of the scale subject to other guidelines)
Advance Rate: Rs.260/- per gram or 70% of the market
value whichever is less.
Period: Repayable within 1 year.
Interest: PLR + 2+int.tax. Eligibility: Only to properly
introduced customers.
Project Financing - Agriculture: Feasibility
parameters:
BC Ratio |
IRR |
NPW |
Feasibility |
Greater than
1 |
More than lending
rate |
+ Positive |
Feasible |
1 |
Equal to lending
rate |
0 |
Marginal |
Less than 1 |
Lower than lending
rate |
Negative |
Not feasible |
B C Ratio =
|
Present worth of benefit
|
Present worth of costs
|
- Net Present Worth = Present worth of benefits - present
worth of costs. Internal rate of return (IRR): Lower
of two discount Difference + between two discount
- Rate NPWO lower discount rate, differences between
two disc rates--- IRR desired for project as per NABARD
norms -15%--- IRR is to be calculated for economic life
of project.
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Swayam
Sewa-Self Help Group (Shg)-Credit Guidelines
- It is pilot project launched by Indian Bank during
93-94.
- As per the scheme, credit is to be provided directly
to 'self help groups(SHG)' for onward lending to their
members.
- Such credit should be used mainly for product and
/or investment purposes.
Quantum of Loan
- A maximum of four times of the savings (members' savings
plus interest earned by on lending the members' savings)
mobilised by the group can be sanctioned as bank loan.
OD limit can be enhanced only at yearly intervals, subject
to the ceiling of one/group.
- Credit is intended to be used for production and investment
purposes like purchase of inputs, repairs to farm machinery
and small investment in dairy, poultry, sheep etc.,
and petty shop etc.,
Rate of Interest:
- Bank to SHG:12.5% including interest tax irrespective
of the quantum of loan due to unrestricted refinance
from NABARD.
Securities:
- Loan agreement signed by all the group members. No
other collateral securities will be insisted upon. Blocked
savings which are converted as s'RIP' deposits can be
pledged.
Repayment:
- 18 to 24 months. OD can also be granted.
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Vidhya
Nidhi Scheme (for studies in India)
Eligibility
- Students with consistently good academic record, with
60% marks in the preceding public examination (relaxable
to 45% for SC/ST students), are eligible to apply for
Educational Loans from our bank, for further studies
in India.
Course of study:
- Full-time Graduate/P G Course in Agriculture, Architecture,
Medicine, Dental Science, Veterinary Science, Computer
Science, PG courses in Industrial Management, Business
Management, Management Science, MCA et., in regular
colleges approved by the Government.
Period of study:
- Normally not exceeding 5 years.
Purpose of loan:
- To meet expenses on tuition fees, examination fees,
hostel fees and books not covered by scholarships and
grants from Govt and other sources and contribution
from own sources.
Amount of Loan:
- Need-based finance upto a maximum amount of Rs.2 lakhs
depending on the family income and capacity to repay.
Disbursement of loan:
- Disbursement of the loan will be made direct to the
college/university.
Repayment:
- For loans upto Rs.1 lakh - in 42 monthly instalments
and for loans above - in 60 monthly instalments, AFTER
COMPLETION OF THE COURSE. Interest charged to the loan
account should be paid regularly by the parent/guardian
(who will also be the guarantor to the loan)
Rate of interest:
- As prescribed by the RBI from time to time.
Repayment holiday:
- A repayment holiday period of 6 months will be allowed
from the date of completion of the course, or securing
a job, whichever is earlier. Insurance can be waived
for loans upto Rs.10000/-
Security:
- Guarantee by the parent/guardian of the student. For
loans above Rs.10000/- LIC policy in the name of the
student, the sum assured on which is not less than the
amount of the loan, to be taken and assigned in favor
of the bank. For loans above Rs.25000/- equitable mortgage
of immovable properties or any other suitable collateral
securities, to fully cover the loan. Sanctioning authority
is Chief Manager and above.
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Vidhya
Nidhi Scheme (for studies in abroad)
Eligibility
- As in Vidya Nidhi Scheme - No concession is allowed
to SC/STs in case of marks.
Course of study:
- Graduates/Post-Graduates courses with good employment
prospects.
Period of study:
- Normally not exceeding 3 years.
Purpose of loan:
- As in Vidya Nidhi Scheme.
Amount of Loan:
- Need-based finance upto a maximum amount of Rs.5 lakhs
depending on the family income and capacity to repay.
Disbursement of loan:
- Made direct to the College/University.
Repayment:
- In 96 monthly instalments, AFTER THE COMPLETION OF
THE COURSE. Interest charged to the loan account should
be paid regularly by the parent/ guardian (who will
also be the guarantor to the loan)
Rate of interest:
- Rate of interest, repayment holiday, security.
Sanctioning authority:
- AGMs and above.
- LIC policy is to be taken as security and assigned
in the name of the bank irrespective of the loan amount.
Security:
- As in Vidya Nidhi Scheme.
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Security
Norms
Agricultural Loans:
Investment loans
where Movable assets are created |
No Collateral
security or Third party guarantee should be taken
for loans upto Rs.25,000 |
For loans above
25000: |
Hypothecation
of asset purchased mortgage of land and/or third party
guarantee wherever |
Where movable
assets are not created (eg.dug.well etc) |
For loans upto
Rs.10,000
Branches should not obtain or insist upon mortgage
of land as security.
For loans above 10000: Hypothecation of assets mortgage
of land/third party gtee.
Wherever necessary. |
Crop loans |
No collateral
security or third party guarantee should be obtained
for loans upto Rs.25,000/-. |
Sericulture
activity under national sericulture project |
Mortgage of
land/shed should not be insisted for projects costing
upto Rs.20,000/- |
Other Priority Sectors:
Housing Loan |
Mortgage of
property or Govt. Guarantee. |
Consumption
Loan |
Guarantee of
one more individuals or group of persons. |
Educational
Loans granted on clean basis (No asset is created)
|
Collateral security/third
party guarantee may be taken. |
Other priority
sector advances upto Rs.Rs.25,000/- |
No collateral
security or third party guarantee should be taken
|
Insurance:
- In respect of both equipment and current assets no
insurance need be taken against Fire and other risks
where the advances is covered under DICGS scheme and
the amount of advance does not exceed Rs.10,000/- However,
it should not be waived where insurance is compulsory
under law or is stipulated by refinancing agencies.
Weaker Sections:
1.Small marginal farmers, landless
labourers tenant cultivators and share croppers.
2.Artisans, Village & Cottage
Industries where individual credit requirements do not
exceed Rs.25,000/-
3.IRDP Beneficiaries.
4.SC/STs
5.DRI beneficiaries
6.SUME beneficiaries
7.Beneficiaries under Swayam Sewa
Project.
8.SLRS (Scheme for Liberation
& rehabilitation of scavengers)
Penal Interest:
1.No penal interest should be
charge for loans upto Rs.25,000/-
2.For limits over Rs.25,000/-
penal rate may be levied at 2% over and above the normal
rate of interest. Floating
rate of interest which will be advised by HO should be
charged if the credit limit is Rs.2 lakhs and
above except in case of direct agricultural advances and
all Govt. sponsored schemes
Advances given to sick units under rehabilitation are
also exempted from penal or overdue interest.
Penal interest is chargeable in case of export finance
if the proceeds are not received within the stipulated
period.
Commitment charges:
- Borrowings enjoying working capital limit of Rs.1
crore and above are subject to a commitment charge of
1% on the full unutilised amount during the quarter.
- Disposal of Applications: Credit limit upto Rs.25,000/-
within a fortnight. Above Rs.25,000/- within 8 to 9
weeks.
- Rejection of proposals: In the case of proposals from
SC/STs rejection should be at a level higher than that
of branch managers. In other cases, the rejections should
be verified subsequently by the regional managers.
Application Forms to be adopted:
- As finalised by Baldev Singh Committee for Agriculture
Loans.
- As finalised by Naik Committee for SSI advances modified
by Kapoor committee.
- As finalised by the Bankers Group appointed by IBA
(for other than SSI & Agriculture). Application
forms should also be made available in regional languages.
- Margin and security norms should be printed on the
reverse of the application from itself.
Photographs of Borrowers:
- 3 copies of recent passport size photographs of all
borrowers (literate/illiterate) should be obtained.
- In respect of advances to weaker sections irrespective
of the limit and for other advances upto Rs.1,000/-
bank should bear the cost.
- Staff loans, Loans/Advances against deposits, LIC
Policies/Govt. securities, advances to partnership firms,
limited companies and advances to reputed persons who
can be easily identified are exempted from the requirement.
- Branches can incur upto Rs.15/- for this purpose where
the cost is to be borne by the bank.
Charging of interest on agricultural loans
- guidelines:
1.Interest on all agricultural
advances should be charged at half yearly rests.
2.In respect of crop loans, interest
should not be added to principal till the loan is due
for repayment. On other
words, interest can be added to principal only when the
crop loan becomes due.
3.In respect of term loans, interest
should not be added to principal till instalments fall
due. In other words, during
holiday/gestation period of term loan, interest should
not be added to the loan account. Hence compounding
of interest on current dues under direct agricultural
sector should be avoided as its is a serious
violation of RBI's instructions.
Service Area Approach
1.Service area approach is a new
strategy to optimise the productivity of lending by banks.
2.Based on the recommendations
formulated by Dr.P.D.Ohja, Deputy Governor of RBI. The
implementation
was effected from 1st April 1989.
3.The objectives of SAA strategy
are:
a.Improving
the quality of lending.
b.Increase
production.
c.Increase
productivity and proper recycling of bank credit and
improvement recovery and hormonise the
efforts of bank for rural development agencies in the
area.
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