PRODUCTS & SCHEMES IN AGRI BUSINESS

PRODUCTS & SCHEMES 1 AGRICULTURAL GOLD LOANS 2 KISAN CREDIT CARD (KCC) 3 PRODUCE MARKETING LOAN 4 ARTHIAS PLUS 5 SCHEMES UNDER MANAGEMENT & COLLECTION AGENT 6 KISAN GOLD CARD SCHEME (KGC) 7 AGRI-CLINIC & AGRI BUSINESS CENTRES 8 LAND PURCHASE SCHEME 9 SCORING MODEL FOR TRACTOR LOANS 10 FINANCING OF SECOND HAND / USED TRACTORS 11 FINANCING POWER TILLERS 12 FINANCING FOR COMBINE HARVESTERS 13 FINANCING FARM MACHINERY 14 SCHEME FOR FINANCING SECOND HAND MACHINERY 15 DAIRY PLUS 16 DAIRY SOCIETY PLUS 17 BROILER PLUS 18 GENERAL CREDIT CARD (GCC) 19 SCHEME FOR FINANCING MFIs/NGOs 20 SHG CREDIT CARD AND SHG GOLD CARD 21 FINANCING PRIVATE COLD STORAGE/ PRIVATE WAREHOUSES FOR ONLENDING TO FARMERS 22 SCHEME FOR FINANCING SEED PROCESSORS 24. SBI KRISHAK UTTHAN YOJNA 25. GARMIN BHANDARAN YOJNA 76 80 82 84 86 88 89 93 100 103 109 118 123 Page No. 03 07 19 25 27 45 51 55 57 70 73

23. FINANCING JOINT LIABILITY GROUPS OF TENANT FARMERS 112

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26. FINANCING COLD STORAGE 27. SCHEME FORM DEVELOPMENT AND STRENGTHENING OF INFRASTRUCTURE FACILITIES FOR PRODUCTION AND DISTRIBUTION OF SEEDS 28. MORTGAGE LOAN TO SEED PROCESSING UNITS

128 132

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29. CAPITAL INVESTMENT SUBSIDY SCHEME FOR COMMERCIAL PRODUCTION UNITS OF ORGANIC INPUTS UNDER NATIONAL 143 PROJECT ON ORGANIC FARMING 30. SCHEME FOR DEVELOPMENT/STRENGTHENING OF AGRICULTURAL MARKETING INFRASTRUCTURE, GRADING AND STANDARDIZATION 31. SCHEME FOR DEBT SWAPPING OF BORROWERS 32. DOS AND DONTS FOR GRAHAK MITRA 33. SWARN JAYANTI GRAM SWAROZGAR YOJNA SCHEME (SGSY)/ SELF HELP GROUP 34. MULTIPLE CHOICE QUESTIONS 35. RATIONALS (AGR) 36. SANJEEVANI TRACTOR LOAN (AGR 1 to AGR 11) 162 173 to 248 249

147 157 160

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1. AGRICULTURAL GOLD LOANS:

========================================================== Agricultural Gold loan is one of the ways of extending financial assistance to farmers for meeting their agricultural expenses. Gold Loans can be granted against gold ornaments / gold wares only and not against gold bars and gold coins. Objective : To extend hassle free finance to farmers / agriculturists against Gold Ornaments / gold wares to increase their liquidity to meet crop production expenses, investment expenses related to agriculture and / or allied agricultural activities. Eligibility : Any person engaged in agriculture or allied activities as well as persons engaged in activities permitted by RBI to be classified under agriculture. It is not necessary to insist for land record extracts or physical inspection of the farm before sanction of Gold loans. The applicant should satisfy the KYC guidelines. Type of Loan : Agricultural Cash Credit/Over draft Demand Loan/term loan. Purpose : Agri Gold Loan availed has to be invested by the Borrower either for meeting crop production expenses and / or for creation of assets to be used in his farming operation or for allied agricultural activities like Dairy, Poultry, Fisheries etc. Quantum of Loan: The amount of loan that can be granted against security of gold ornaments should not be higher than the advance value of gold ornaments pledged. Advance value: This is the price of gold (18,22 & 24 carat purity) advised by LHO every month less margin. Margin: 30% on price of gold advised by LHO. In deserving cases BM has discretion to charge 25% margin. Interest: Interest should be charged as applicable to agricultural advances. Processing Fee: As applicable to Agriculture Advances.

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Authority: a. Recommending Authority-Cash officer / Special Assistant(cash) responsible for weight, purity & value of gold ornaments b. Sanctioning Authority - Branch Manager/Accountant Documents to be obtained at the time of sanction : I. DP Note & DP Note take delivery letter II. Revised Application cum appraisal (SIM-GL/1) III. Gold ornaments take delivery letter (SIM-GL/2) IV. Witness letter for illiterate borrowers (SIM-GL/3) V. Arrangement letter (SIM-GL/4) to be obtained in duplicate and a copy to be handed over to the borrower. VI. Two copies of photograph of the borrower VII. Memorandum in respect of gold ornaments deposited as security(SIM-GL/9) Repayment : a. Cash Credit / Overdraft : Like KCC, it is a running account for a period of 3 years, subject to review (outstandings vis--vis advance value of the ornaments pledged) at annual intervals. It should always be ensured that the outstanding in the loan account does not exceed the market value of the ornaments pledged. b. Demand Loan / Term Loan : The repayment period of the loan should be fixed so as to coincide with the harvesting and marketing season / generation of income from the activity, allowing 2 to 3 months time after harvesting to market the produce and realize the proceeds. However, 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. It should always be ensured that the outstanding in the loan account does not exceed the market value of the ornaments pledged, especially when a longer repayment period is provided. In such an event, the borrower should be advised to repay adequately to regularize the position.

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Discretionary Powers: To be exercised as per Delegation of Powers advised by the LHO. Custody of Ornaments : The gold ornaments must be placed in the strong room under the joint custody of the Branch Manager/Accountant and Cash Officer. Custody of Loan Document : By cash accountant in a fireproof safe. Operational Procedure : Branch functionaries / sanctioning Authority should satisfy themselves by oral enquiry about the applicant being otherwise eligible. Photograph of borrower is to be obtained in all cases and affixed to loan opening form and Gold loan register also. Due date for repayment / or instalments to coincide with harvesting and marketing of crops raised. Valuation of the security i.e. Gold Ornaments is based on weight and fineness of the gold content. Circular instructions are given by the Bank (every month) regarding the price of gold that can be financed per 10 gms. based on purity of gold. Branch cash officer/Award cash officer(Special Assistant/Senior Assistant in charge of cash is responsible for ensuring genuineness and purity of gold ornaments. Purity of gold can be ascertained by using the following methods. a. Touch stone method b. Nitric Acid method c. Specific gravity method

Services of local goldsmith can be used only in exceptional cases for large advances and his fees paid by debit to branch interest account.

Details of the gold ornaments pledged like description, gross weight, net weight, valuation rate and advance value are noted in the Gold ornaments take delivery letter (SIM-GL/2) and is certified by the cash officer. Gold Loans can be granted to joint borrowers also on E or S, F or S, L or S and B or S terms.

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 Gold Loans can be issued to illiterate borrowers also after explaining them about the implications of the loan and the various documents obtained. On written request of the borrower(s), part delivery of ornaments may be given against part repayment of the loan, provided the advance value of the ornaments still in the Banks possession fully cover the outstanding in the account. The borrowers acknowledgement for receipt of ornaments delivered to him / them should be obtained in the Gold Loan Register, in all cases.

Under similar terms and conditions advance may be granted against pledge of silver ornaments/silver ware also. 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.

Calling up of advance : Advance will be called up, when (i) the value of the gold is less than the outstandings or (ii) the account becomes NPA. If the account is irregular, a letter should be sent to the borrower requesting him/her to deposit the amount / regularize the account. If the borrower fails to regularise the account and it continues to be irregular, a notice should be sent advising that the ornaments will be sold by public auction, if the loan and interest are not paid within 30 days from the date of notice. This notice must be dispatched to the borrower under Registered Post with acknowledgement due. Whenever any of the notices described above is sent, the date of dispatch should be noted in the respective account of Gold Loan register under the initials of the official signing the notice. Sale of Gold Ornaments : When an advance has been called up and repayment is still not forthcoming, the Bank has the right to sell the gold ornaments pledged, after giving reasonable notice to the Borrowers (vide section 176 of the Indian Contract Act). If the account is not put in order within the time stated in the notice, the ornaments should be put up for auction with the prior approval of the Controlling Authority.

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2. KISAN CREDIT CARD (KCC)

======================================================== OBJECTIVES : To provide timely and adequate credit to farmers to meet their production credit needs (cultivation expenses) besides meeting contingency expenses, and expenses related to ancillary activities through simplified procedure facilitating the borrowers for availing loans as and when they need. ELIGIBILITY : Owner cultivators, tenant cultivators and Share croppers. Agricultural borrowers having good track record for the last 2 years (i.e., maintaining standard loan accounts). Creditworthy new borrowers can also be financed. SALIENT FEATURES : Production credit limit Rs. 3000/- and above (reduced to Rs.1000/- in Uttaranchal State). Credit limit based on operational land holding cropping pattern and scale of finance. Upper band of the revised Scale of Finance (SOF) (i.e., maximum twice the amount of SOF advised by District Level Technical Committee) can be used for progressive farmers. The total limit is inclusive of 20% of production credit, which includes crop production expenses and working capital for allied agricultural activity, as contingency credit /consumption loan. Expenses to meet important ancillary activities to production can also be financed in addition to the above. An annual credit limit is sanctioned with suitable seasonal sub-limits for crops production, contingency expenses and ancillary activities.

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 Withdrawal - through withdrawal slips and cheque books for literate borrowers having credit limit of Rs. 25,000/- and above. All disbursements can be made in cash.

Limit is valid for 3 years subject to annual review.

A Kisan Credit Card cum pass book will be issued. KCC borrowers below 70 years of age are covered under Personal Accident Insurance Scheme (PAIS). Eligible crops can also be covered under Crop Insurance Scheme National Agricultural Insurance Scheme (NAIS). All branches engaged in agricultural advance can issue KCCs. MARGIN : If SOF is applied for financing - No margin. If cost of cultivations is worked out and financed (i.e., in the absence of SOF): Upto Rs. 50,000/- ... Nil Above Rs. 50,000/- ... 15 to 25%. (Depending upon the risk perception). INTEREST RATE : As applicable from time to time WORKING EXAMPLE FOR ARRIVING A KCC LIMIT (Given in Annexure) SECURITY & DOCUMENTATION: For crop loans (ACC / KCC) upto Rs. 1 lac to farmers having legal ownership of agricultural land with good repayment track record for last two years, the security norms were modified with immediate effect as under : Primary : Hypothecation of standing crops Collateral : NIL.

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SECURITY & DOCUMENTATION

KCC LIMIT Upto Rs. 50,000/-

SECURITY PRIMARY Hypothecation of standing Nil crops. COLLATERAL

DOCUMENTS TO BE OBTAINED Simplified Hypothecation Agreement (AB-1 Sim) in local language. One page letter of Arrangement
Simplified Hypothecation Agreement (AB-1 Sim) in local language. Guarantee Agreement (AB-2) and/or Mortgage Deed (Ab-3) as the case may be One page letter of arrangement. Hypothecation Agreement (AB1). Guarantee Agreement (AB-2) and /or Mortgage Deed (AB-3) as the case may be Arrangement Letter.

Rs.50,001/Rs.1,00,000/-

to Hypothecation of standing crops. Mortgage/Charge over land.*

Above Rs.1,00,000/-

Hypothecation of standing crops. Mortgage/Charge over land.*

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Note : For KCC limit above Rs50,000/- if there are genuine difficulties in creation of mortgage / charge over land, any other appropriate security can be obtained. Suitable third party guarantee can also be obtained, with prior permission of controlling authority, in such instances. Care : The ceiling for collateral-free contract farming loan per farmer is enhanced to Rs.2 lacs. The discretion should be exercised by the sanctioning authority if he considers the connection as a good credit relation. PERSONAL ACCIDENT INSURANCE SCHEME FOR KCC HOLDERS 1. Salient features of the Scheme: The scheme is for uniform implementation by all Banks throughout the Country. A master Policy will be issued by Insurance Company to each Zonal/Regional Office of Commercial Banks covering all its KCC holders 2. Persons Covered: KCC holder up to the age of 70 years for risks against death or permanent disability resulting from accidents caused by external, violent and visible means and occurring within the geographical jurisdiction of India. 3. Risk coverage :

Death due to accident : (within 12 months of the accident) caused by outward violent and visible means : Rs. 50,000. Permanent total disability : Loss of two limbs or two eyes Or one limb and one eye : Rs. 50,000 Partial disability : Loss of one limb or one eye : Rs. 25,000

4. Period of Insurance : One year from the date of receipt of premium by the Respective Insurance Company. Three year option is also available. 5. Premium : Per KCC holder : Rs.15/ per annum.

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 Premium is shared as 2 : 1 by the Bank and Farmer. KCC holders should give the nomination. The service tax is waived for this cover. In order to ensure continuity of the policy the Banks should arrange to pay the premium for the next year in advance to keep the policy continuously in force. 6. Operational Procedure : The servicing of the business will be undertaken by the four Companies viz., National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd., and United India Insurance Company Ltd., - Zone -wise : (as per allocation). The Regional Offices of Commercial Banks will pay the premium to the nearest designated office of the Insurance Company along with the list of KCC holders. The designated office of the Insurance Company will issue Master Policy covering the KCC holders to the Regional Offices of Commercial Banks. The KCC holders details would be furnished in triplicate as per the following format: 1. S.No. 2. Name & Fathers Name of KCC holders 3. Address 4. Age 5. KCC account No. 6. Existing disability (if any) 7. Name of the Nominee and Relationship One copy will be endorsed and returned back to the concerned Bank Claim Procedure : The claims administration will be done by the policy issuing Office. Duly completed claim form to be submitted.

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 Death certificate from attending Doctor. Photo of the injured person highlighting the disability

Report of claims enquiry cum verification committee, which consists the following Officials as members. 1. Branch Manger 2. Lead Bank Officer 3. Nominated Officer of the Insurance Company

Time limit for lodging claims : Nominee of the injured to report to the concerned Bank within 30 days. Any accidental injury within a period of 12 months alone is admissible. WORKING EXAMPLE OF A KCC: Shri Dipak Basu, a farmer is having 2.5 acres of irrigated land. The cropping pattern and the scale of Finance of the crops grown by Shri Basu are as under: Crop Paddy Paddy Wheat Season Summer (April-July) Kharif (July- Oct) Rabi (Nov-Feb) Repayment Sept-Oct Dec- Jan May-June Scale of Finance Rs.5,000/Rs.5,000/Rs.5,000/Acreage of cultivation 1.5 acres 2.0 acres 2.5 acres

In course of discussion with the farmer, he proposes to avail the bank loan and plans to repay the amount in the following manner: REQUIREMENT REPAYMENT April 2009 May 2009 June 2009 July 2009 Aug 2009 Sep 2009 OCT 2009 Nov 2009 Dec 2009 Rs.7,500/Rs.5,000/Rs.4,000/Rs.4,500/Rs.3,000/Rs.10,000/Rs. 7,500/-

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Jan 2010 Feb 2010 Mar 2010 April 2010 May 2010 June 2010 annually for feed

Rs.6,000/-

Rs.8,500/Rs.4,000/and medicines. He also needs another Rs.2,000/- towards

Shri Basu is having 4 Jersey crossbred cows for which he needs Rs.5,000/maintenance and purchase of farm implements. Please examine the proposal and workout a KCC limit with usual provision for contingent needs.

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Calculation Sheet for KCC Limit: I.Crop Loan (Production credit limit) (Rupees) S.No Crops Grown Kharif A B C Sub Total (A) Rabi A B C Sub Total (B) Summer A B C Sub Total (C) Grand Total No. Acres of Irrigated/Rainfed Scales of Total Finance Loan Amount Due date

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II. Peak Level Limit (enter cumulative requirement of each season)

S.No Crop KHARIF RABI SUMMER Total Crop Loan REPAYMENTS 1 NET 2 Working capital requirement of allied *** 3

Jan Feb Mar April 6000 12500 12500 12500 12500 7500 18500 12500 12500 20000 6000 12500 12500 12500 20000 5000 5000 5000 5000

May

July Aug Sep Oct Nov 10000 10000 10000 10000 10000 12500 4000 7500 7500 7500 7500 7500 7500 3000 20000 11500 17500 17500 17500 13000 17500 8500 4000 4500 3000 11500 7500 17500 17500 13000 10000 17500 5000 5000 5000 5000 5000 5000 5000

June

Dec 10000 12500 22500 4000 18500 5000

activities Total production limit 17500 17500 17500 25000 16500 12500 22500 22500 18000 15000 22500 23500 Ancillary credit 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 requirements (20% of ***) Contingent Needs Grant Total 1+2+3+4 3500 3500 3500 5000 3300 2500 4500 4500 3600 3000 4500 4700 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 24500 24500 24500 32000 23500 19500 29500 29500 25000 22000 29500 30500 (TABLE II) = 32000 FIELD OFFICER

KCC LIMIT (PEAK LIMIT UNDER ANY ONE OF THE MONTH) BRANCH : DATE :

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REVIEW OF KCC LIMIT 1. Name of the Borrower(s) : i. ii. iii. 2. Village 3. Documented Original limit sanctioned : Limit : Rs. 4. Last Repayment : Due date 5. Repayment made : Due date 6. Summation of credits in the account Date : - Amount Rs. - Amount - Rs. : Rs. : Account No.

7. If repayment is after the due date, please comment on reasons : 8. Position of other loan accounts : Facility Purpose Outstandings Drawing Power Irregularity

9. KCC loan required for the proposed crops : Rs. 10. Remarks : Place : Date : Recommending Officer SANCTION : KCC account reviewed and sanctioned for Rs. _________________________ for the year _____________. Place : Date : Sanctioning Authority

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3. PRODUCE MARKETING LOAN

OBJECTIVES & ADVANTAGES : To help farmers avoid distress sale of their produce To enable prompt repayment of crop loan dues and provide liquidity to farmers to meet contingency needs. To offer the facility of loan against the stocks stored in farm houses, in addition to loan against warehouse receipts. ELIGIBILITY : 1. All non-defaulter borrowers of our branches, who can store the produce either in their own farm/premises itself or in a Warehouse / cold storage. 2. Crop loan borrowers of other Banks and also Non-Borrower Farmers, who store their produce/ stocks in a Warehouse / cold storage. EXPOSURE NORM : All Circles are now permitted to take exposure of upto Rs.3.00 cr (Rupees Three crores only) per private warehouse. However, Hyderabad Circle has been permitted to take exposure of upto Rs.7.50 cr per private warehouse. (Ref: Cir.No.ABU/PD&M/23/19/2006-07 dated 17.01.2007 of ABU, Corporate Centre) SANCTION LIMIT: 60 to 80% of value of produce depending upon the place of storage, subject to a maximum of Rs.10 lacs. VALUATION OF STOCK: Based on price per quintal, (i) generally obtaining at the time of harvesting of the commodity in the current year and (ii) Current market price, whichever is lower, multiplied by the weight of the stock. MARGIN : 1. Loan sanctioned against goods stored in Farmers godown : 40% 2. Loans sanctioned against Ware House Receipts (WHR):

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TYPE OF STORAGE LOANS WAREHOUSE months Central/State Warehouse Corporation Godown and Warehouses by Accredited Multi National

UPTO 20%

6 LOANS

ABOVE

months upto 12 months 30%

Commodity Exchange. Other Private Ware Houses SECURITY :

25%

35%

1. Loan sanctioned against goods stored in Farmers godown : Primary : Hypothecation of stocks. Collateral : Mortagage / Charge over Land or Third Party guarantee for loans above Rs. 50,000/-. 2. Loans sanctioned against Warehouse Receipts (WHR) : Primary : Pledge of stocks. Collateral : No collateral is required for loans upto the maximum permitted limit of Rs.10 lacs under the scheme. DOCUMENTATION : 1. Loan sanctioned against goods stored in Farmers godown

Agreement for Hypothecation (AB1sim / AB 1)

AB 2 and/or AB 3 as required Arrangement Letter 2. Loans sanctioned against Ware House Receipts: Demand Promissory Note & DPN take delivery letter The Warehouse Receipt should be pledged duly endorsed.

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 A letter of Undertaking should be obtained from the Warehouse Authorities to the effect that the stocks covered by the WHR, will be released by them only based on a written communication from the Bank. Arrangement letter STOCK STATEMENT: In the case of financing our farmer borrowers, stock statement in the prescribed simple format should be obtained for assessing the value of the stocks when stored in their own custody. Details : Crop - Date of Harvest Variety - Weight Valuation will be done as mentioned earlier. INSPECTION : Loans upto Rs.25000/- once in two months and for loans above Rs. 25,000/- monthly. INTEREST : As applicable to crop loan (ACC). Concessionary interest @ 8% (fixed) is available for loans sanctioned upto 30.09.2009. INSURANCE : If value of stock exceeds Rs.15000/-, cover for the full value from approved insurance company. DISBURSEMENT: In case of our existing borrowers, loan can be disbursed by debit to PML a/c and credit to existing crop loan KCC account, up to the extent of amount due; excess amount can be disbursed to the borrower. In case of borrowers of other bank, ascertain the crop loan amount due to that bank and issue a demand draft/ bankers cheque for the amount due, in favour of the other bank. Excess amount can be disbursed to the borrower. In case of non-borrower farmers, an affidavit has to be obtained at the time of sanction of PML, wherein the borrower should undertake that no loan was availed by him from any source. Accordingly, entire PML loan can be disbursed to the borrower. REPAYMENT: Loan has to be repaid within a maximum period of 12 months depending upon the crop.

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OPERATIONAL PROCEDURE : Separate ACC (PML) is to be opened. Loan is treated as ACC. Classified as direct lending to agriculture. Crop loan to be closed by proceeds of PML (i.e., Debit PML & Credit existing crop loan a/c) Crop loan limit to be renewed in the subsequent season. Produce hypothecated to the Bank should be kept separately. Control return to controllers as in the case of other loans.

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Annexure - I Application for short term Agricultural credit against hypothecation of farm produce under Produce (Marketing) Loan Scheme The Branch Manager State Bank of .................................. Dear Sir, I/We hereby apply for a loan of Rs. .......................(Rupees..................................... only) against hypothecation of Farm Produce under Produce (Marketing) Loan Scheme and furnish below the necessary particulars: 1. Name 2. Age 3. Address 4. a) Limit of crop loan sanctioned Rs. b) Date of sanction c) Present outstandings Rs. 5. Particulars of farm produce stored : Sl. Item Quantity No. (Qtls) Market/Govt. Total value Rate (Rate per Qtl. Rs. ..........) Advance value (60% of col. 5)

6. Place where the produce is to be stored : I/We have not borrowed and/or applied to any other financial institution to avail loan for this purpose. I/We undertake to maintain the quality standards of produce and will preserve the same in good condition. The Bank authorities will be allowed to inspect the stock periodically to ascertain the quality, quantity, and arrangement of storage. I/We declare that the details given here in above are true and correct to the best of my/our knowledge and belief. Place : Date : (Applicants Signature)

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Appraisal Report of the Supervising Official The details of loan application have been scrutinised and are found correct. Stock offered to the Bank by the borrower for hypothecation has been inspected and verified. The applicants crop loan account is regular in all respects. Quality/Grade of the produce is good. The Produce (Marketing) Loan applied for Rs. ...................... (Rupees.....only) is recommended for sanction. Date : Appraising Officer

Sanctioned Loan of Rs. ........................ (Rupees ................................................ only) as recommended. Date : MANAGER MANAGER (DBD) / BRANCH

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4. ARTHIAS PLUS Scheme for Financing commission Agents/Arthias

OBJECTIVES : To finance commission agents against their receivables from farmers. To increase lendings under priority sector. Eligibility for classifying 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. Commission agents having receivables from farmers only. Commission agents functioning in rural and semi urban markets/mandis. TYPE OF ADVANCE : Cash credit (Hypothecation of book debts not older than 6 months). CLASSIFICATION : Priority sector Agricultural segment indirect Agri Finance. LOAN QUANTUM : Max. Rs. 50 Lacs MARGIN : 40% SECURITY : Upto Rs. 25 lacs - Primary : Hypo.of receivables & movable assets (if any). Collateral : Equitable Mortgage of Resi / Comm. Property (Non-Agri) with worth 1.5 times of the advance. Above Rs 25 lacs and upto Rs. 50 lacs Primary : Hypo. of receivables & movable assets (if any). Collateral : Equitable Mortgage of Resi / Comm. Property (Non-Agri) with worth 2 times of the advance value. Mortgaged property to be revalued as per the extant guidelines.

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RATE OF INTEREST (monthly rests) Upto Rs. 25 lacs - 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. APPLICATION & ASSESSMENT : As applicable to Trade advances. DOCUMENTS : (1) Hypothecation Agreeement - AB1. (2) Guarantee Agreement - Form E (as applicable in SIB segment). (3) D.P.Note & D.P.Note Take delivery letter. REPAYMENT PERIOD : Maximum Six months. REVIEW & RENEWAL : Loan should be liquidated at the end of cropping & marketing season. Review and renewal as applicable to trade advances. OTHER TERMS AND CONDITIONS : If the applicant is a borrower of other banks, he should close the a/cs before the branch disburses the facility. Borrower should have a sound financial standing. The statement of eligible receivables should be obtained at half yearly intervals verified from borrowers books of a/c or audited financial statement. N.B. : 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.

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5. MANAGEMENT AND COLLECTION AGENT (MCA) SCHEMES FINANCING FARMERS RECEIVABLES AND CULTIVATION OF CROPS
The following three schemes are in operation at present under the Management Collection Agent (MCA) model :i) Management and Collection Agent scheme for financing farmers for cultivation of crops through mills companies / factories processing the produce grown by farmers. ii) Management and Collection Agent scheme for financing receivables of farmers through mills companies / factories processing the produce grown by farmers. iii) Management and Collection Agent scheme for financing receivables of poultry farmers through poultry companies. Some modifications were approved in the schemes, superseding earlier features of the schemes to address the double financing issues and compliance of RBI guidelines on Outsourcing the Financial Services (Management & Collection Agent). The salient features of the modified three schemes are given hereunder. (i) SCHEME FOR FINANCING FARMERS FOR CUTIVATION OF CROPS THROUGH MANAGEMENT AND COLLECTION AGENT (MCA) Purpose To finance farmers for the cultivation of crops, the produce of which is procured by the companies /firms/ mills / factories for further processing. Max. loan per farmer Rs. 1 lac. Objective Bulk financing of farmers (through corporates/firms) with tie up for recovery of loan. Eligibility

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a. Owner cultivators, share croppers and tenant cultivators (hereinafter referred to as Farmer) in the area of operation of the companies /firms/ mills / factories. b. Companies /firms/ mills / factories having: Satisfactory track record of payment of dues to the farmers ; Satisfactory financial position ; CRA rating of SB-3 or above * The scheme will be implemented through mills companies / factories financed by the Bank only. *The scheme may be extended to SB - 4 rated units financed by the Bank, with the approval of the Circle Management Committee (CMC). Operating instructions a. The selected mills / companies / factories (hereinafter referred to as Agent) will be approached by the principal branch (hereinafter called the "Nodal Branch") to be specifically identified by the CMC for entering into a Management and Collection Agent Arrangement with the Bank. The Branch from where the units / MCA are financed should necessarily be the Nodal Branch. The payments made through the MCA route should be taken into account while computing finance to be made available to the unit. The scheme will be administered through a designated branch (es) (hereinafter called the "Link Branch(es)". b. At the beginning of each crop season, the prospective groups of farmers will be finalized by the Agent, whose crop cultivation will be financed. c. A line of credit (LoC) will be administratively approved for the Agent (Mills / companies / firm/factories). This will be limited to a maximum of 25% of the working capital limit sanctioned to the unit. d. The amount of the line of credit so determined will be disbursed through a separate ACC account for onward payment to the borrowers by the Agent. e. The Agent, at stipulated intervals, will submit necessary proof to the Bank of having disbursed the amount. The Agent will be required to maintain necessary

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records. Loan Documents obtained from the farmers by the MCA should be kept with the Link Branch. Loan application and sanction letters should be obtained/ given and copies held along with the documents executed by the farmers. Accounting Procedure a. The disbursal of the Line of Credit will be through a specified account to be opened at the Link Branch as an ACC account. b. The separate ACC account will be styled Farmers Cultivation A/c ------- M/s. (Name of the Mill / Company / factory). A cheque book will be issued to the Agent. The payments to the farmers will be made by way of cheques mentioning the borrowers bank account to be credited. c. Management & Collection Agent's fees (0.05 to 0.10%) will be paid by the Link Branch by to their Branch Charges Account. Role of the Agent The Agent will be responsible for undertaking the following acts for and on behalf of the Bank: a. Selecting the farmers to be covered under the scheme, who should also be their regular suppliers of crops falling in their area of operation. b. Helping the farmer to furnish all the information as required by the Bank and ensuring that the borrowers execute all security documents. c. Making payment to input suppliers against the proper acknowledgement / authorization of the identified farmer upto the specified limit sanctioned. d. Acknowledging that such crop-grown stand hypothecated to the bank as evidenced by the loan document executed by borrowers. e. Ensuring that payments when due are remitted to the Bank for liquidation of the loans. f. Ensuring payment is made at the earliest (maximum 360 days from the date of execution of Management and Collection Agent Agreement). Post-dated cheques

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(principal & interest) will be given by the company / mills / firms / factories to the Bank. g. Indemnifying the Bank against any loss arising out of any dispute in management of the scheme. Role of the Bank There will be two branches of the Bank, which will be involved in the scheme: the Nodal branch and the Link branch. Role of Nodal Branch Identification of the mills / companies / factories for acting as Agent. Appraisal and assessment of the Line of Credit to the "Agent". Obtaining the Administrative approval from the competent authority for the Line of Credit. Arranging documentation for the Line of Credit (LoC)with the identified Agent (Mills / companies / factories). Handholding the Link Branch until the arrangement stabilises. Regular visits to the Link Branch and mills / companies / factories for supervising the operation of the scheme. Ensuring repayment of the loan through proper handling of the Post Dated Cheques (PDCs) Role of Link Branch Maintaining the Line of Credit account of the Agent Sanction of loans within branch powers to farmers identified by the Release of the Line of Credit to the Agent Obtention of Post Dated Cheques (PDCs) and sending to the nodal Follow up of recovery with the agent.

Agent

branch to ensure timely liquidation of the Line of Credit.

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The nodal branch as well as the link branch should ensure the end use of funds.

Delegation of Financial Powers For the purpose of administrative approval, the line of credit will be treated equivalent to sanction of credit facilities and will be approved by the respective authority/committee. The individual loans to the farmers will be sanctioned by the respective Branch Managers of the Link Branches within their financial powers. Repayment The Line of Credit will be liquidated by the Agent through Post-dated cheques (PDCs), which will be given to the Link Branch at the time of each release from the Line of Credit. PDC will be for both the principal amount and interest amount. PDCs cannot be post-dated beyond 360 days from the date of execution of Management and Collection Agent Agreement. Payment of PDC on due date shall be the responsibility of the nodal branch. The liability on account of the PDC has to crystallize on the MCA. The liability on account of the PDCs should be crystallised on the unit acting as MCA by debit to the units CC A/c on the due date regardless of availability of DP in the CC A/c. No Dues Certificate As per extant instructions, for production loan (KCC/ACC) upto Rs 50,000/- and loans upto Rs 1 lac under formal tieup arrangement for repayment, a declaration from the prospective borrower of his indebtedness to any other bank/ commercial institution only is to be obtained. KYC Norms KYC will be the responsibility of the Link Branch from where the individual limits to farmers are sanctioned

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Advantages A. To the Company:- i. Better & improved quality of the production by farmers higher quality of the produce. ii. Enhanced reputation of the mills / companies / factories. iii. Arranging for loans will induce farmers to increase acreage under the particular crop cultivation, which will in turn increase capacity utilization of mills / companies / factories. iv. Profits/ margins earned on bulk procurement and supply of inputs to farmers. B. To the Farmer :- i. Hassle free production loan. ii. Assured market C. To the Bank: i. Loans under this scheme will be treated as Direct Agricultural advances.. ii. High value advances with low transaction and supervision cost. iii. Enhancement in the customer base of the branch, which can be used for selling/cross selling Banks various , increasing deposit base and other income of the Link branch. Documents a. Management and Collection Agent Agreement with the Agent. (To be retained at the Nodal Branch) b. Agreement for Loan and Hypothecation of Crops. (To be retained at the Link Branch). c. Guarantee agreement (Corporate Guarantee if Agent is a Company) to be executed by the MCA (To be retained at the Nodal Branch) Security Primary: Hypothecation of standing crops. Collateral: Indemnity by the Agent against non-payment Post Dated Cheques (PDCs) Guarantee by the MCA

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Proc.Charges. As applicable. Circle may exercise its discretion in the matter. Inspection As per extant instructions to be done by the link branch. Nodal branch may carry out sample checks Interest As per interest rates applicable from time to time. For the current financial year, crop production loans upto Rs. 3 lacs for 1 year duration / repayment are to be sanctioned at 9% rate of interest on which 2% subvention is available from the Govt. As maximum loan under this scheme per farmer is upto Rs. 1 lac (and subvention of 2% from the Govt is available) the interest charged will be 9% p.a. (at present) to the farmer. Claiming of subvention amount will be as per the scheme approved by the Bank based on GOI / RBI guidelines and the subvention amount as and when received will be passed on to the company/ factory for onward reimbursement to the farmers. (ii) SCHEME FOR FINANCING RECEIVABLES OF FARMERS THROUGH MANAGEMENT AND COLLECTION AGENT (MCA) Purpose To finance farmers against their receivables on account of supply of crop produce to processing firms / companies/ mills / factories. (e.g.: Sugarcane, cotton, rice, etc). Post production/ post supply short term loans through the firms / companies / mills / factories, etc. Eligibility a. Owner cultivators, share croppers and tenant cultivators b. Companies / firms/ mills / factories having: (i) Satisfactory track record of payment of dues to farmers (ii) Satisfactory financial position (iii) CRA rating of SB-3 or above * *The scheme may be extended to SB - 4 rated units financed by the Bank, with the approval of the CMC. Operating instructions a. The selected companies/ firms/ mills (hereinafter referred to as Agent) will be approached by the principal branch (hereinafter called the "Nodal Branch") to be

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specifically identified by the CMC for entering into a Management and Collection Agent Arrangement with the Bank. The Branch from where the units / MCA are financed should necessarily be the nodal branch. The payments made through the MCA route should be taken into account while computing finance to be made available to the unit. The scheme will be administered through a designated branch(es) (hereinafter called the "Link Branch(es)". b. At the beginning of each season, the prospective groups of farmers will be finalized by the Agent whose receivables will be financed. c. A line of credit will be approved for the Agent depending upon the quantity of produce purchased directly from farmers and the market price. Previous years operation / price in this regard will be taken / reckoned for fixing the line of credit. d. The amount of the line of credit so determined will be disbursed through a separate specified ACC account for onward payment to the borrowers by the Agent. The payments to the farmers will be made by way of cheques mentioning the borrowers bank account to be credited. e. The Agent, at stipulated intervals, will submit necessary proof to the Bank of having disbursed the amount. Loan Documents obtained from the farmers by the MCA should be kept with the Link Branch. Loan application and sanction letters should be obtained/ given and copies held along with the documents executed by the farmers. Accounting Procedure a. The disbursal of the Line of Credit will be through a specified account to be opened at the Link Branch as an ACC account. b. The specified ACC account will be styled (Crop name ) Farmers Receivable A/c M/s. (Name of the companies/ firms/ mills). A cheque book will be issued to the Agent. c. Management & Collection Agent's fees (0.05 to 0.10%) will be paid by the Link Branch by debit to their Branch Charges Account. Role of the Agent

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The Agent will be responsible for undertaking the following acts for and on behalf of the Bank: a. Selecting the farmers to be covered under the scheme, who should also be their regular suppliers of the crop produce. b. Assisting the farmer to furnish all the information as required by the Bank and ensuring that the borrowers execute all security documents as may be required by the Bank. c. Making onward payment to the prospective/identified farmer equivalent to the value of the crop produce supplied from the Special Account maintained at the Link Branch. d. Acknowledging that such receivables stand hypothecated to the bank as evidenced by the loan document executed by borrowers. e. Ensuring that payments when due are remitted to the Bank for liquidation of the loans against such receivables. f. Ensuring payment of receivables at the earliest (max. 90 - 120 days). g. Indemnifying the Bank against any loss arising out of any dispute in management of the scheme. Role of the Bank There will be two branches of the Bank, which will be involved in the scheme: the Nodal branch and the Link branch. Nodal Branch Identification of the companies/ firms/ mills for acting as Agent. Appraisal and assessment of the Line of Credit to the "Agent". Obtaining the Administrative approval from the competent authority for the Line of Credit. Arranging documentation for the Line of Credit with the identified Agent (companies/ firms/ mills). Handholding the Link Branch until the arrangement stabilises.

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Bi-monthly visit to the Link Branch and companies/ firms/ mills for supervising the operation of the scheme. The PDCs should be drawn by the unit on the Cash Credit account with the nodal branch. The total disbursement from the link branch will be advised by the Link Branch to the nodal branch on a daily basis and payment of PDC on due date shall be the responsibility of the nodal branch.

The liability on account of the PDC has to crystallize on the MCA. The liability on account of the PDCs should be crystallised on the unit acting as MCA by debit to the units CC A/c on the due date, regardless of availability of DP in the account. Link Branch Maintaining the Line of Credit account of the Agent Sanction of loans within branch powers to farmers Release of the line of credit to the Agent Obtention of Post Dated Cheques (PDCs) and sending to the nodal branch to ensure timely liquidation of the Line of Credit. Follow up for recovery with the Agent. The nodal branch as well as the link branch should ensure the end use of funds. Delegation of Financial Powers a. The line of credit will be treated equivalent to sanction of credit facilities and will be approved by the respective authority/committee. b. The individual loans to the farmers identified by the Agent will be sanctioned by the respective Branch Managers of the Link Branches within their financial powers for sanction of Working Capital Loans. The loan amount/limit to the individual borrowers will be sanctioned on the strength of the list of cultivators (villages) to be provided by the Agent with other details. The limit sanctioned

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per farmer by link branch will be based on, inter alia, i) area under crop cultivation ii) ruling prices for the produce grown iii) loan margin of 20%.

Repayment The Line of Credit will be liquidated by the Agent through Post dated cheques (PDCs), which will be given to the Link Branch at the time of each release from the Line of Credit. ` No Dues Certificate Not required as the bank finance is against the receivables of the Agent only. KYC Norms KYC will be the responsibility of the Link Branch from where the individual limits to farmers are sanctioned. Advantages A. To the Company:a. Immediate payment of produce procured to the farmers b. Enhanced reputation, c. Faster payment will induce farmers to increase acreage under the crop cultivation, which will in turn increase capacity utilization of companies/ firms/ mills. B. To the Farmer a. Immediate payment b. Better price C. To the Bank: a. Loans under this scheme will be treated as Direct Agricultural Advances. b. High value advance with low transaction and supervision cost.

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c. Enhancement in the customer base of the branch, which can be used for selling/cross selling our various products, increasing deposit base and other income of the Link branch.

Documents a. Management and collection Agent Agreement with the Agent. (To be retained at the Nodal Branch) b. Agreement for Loan and Hypothecation of Receivables to be executed by farmers (maximum 20 farmers at a time). (To be retained at the Link Branch) c. Guarantee agreement (Corporate Guarantee if Agent is Company) to be executed by the MCA. (To be retained at the Nodal Branch) Security Primary: Hypothecation of receivables. Collateral: Indemnity by the Agent against non-payment Post Dated Cheques (PDCs) Guarantee by the MCA.

Processing Charges As applicable. Circle may exercise its discretion in the matter. Inspection Will be part of the inspection function of the nodal branch Interest 2% below PLR STATE BANK ADVANCE RATE Risk factors and their mitigation Risk Factor Mitigation The agent can show inflated price of crop purchased from the farmers so as to increase the line of credit. Market price will be ascertained at the time of appraising the line of credit. The payment to the farmers can be delayed by the agent. Companies with good payment record to farmers will only be identified as

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agents.

(iii)

SCHEME

FOR

FINANCING

RECEIVABLES

OF

POULTRY

(BROILER) FARMERS THROUGH MANAGEMENT AND COLLECTION AGENT (MCA) Purpose To finance the receivables of poultry farmers against rearing charges payable by Poultry companies/ corporate on supply of chicken / eggs. Post production/post supply short-term loans. Eligibility Poultry farmers (hereinafter referred to as Farmer) who are registered with the poultry company through line of credit to Poultry companies/ corporates acting as Management and Collection Agents (a) enjoying credit facilities from us, (b) having satisfactory track record of payment of dues to farmers, (c) satisfactory financial position and (d) CRA rating of SB-3 or above. The facility under the scheme will be restricted to units financed by SBI only. Operating instructions a. The selected poultry companies (hereinafter referred to as Agent) will be approached by the principal branch (hereinafter called the "Nodal Branch"). The Branch from where the units / MCA are financed should necessarily be the nodal branch. The payments made through the MCA route should be taken into account while computing finance to be made available to the unit. The scheme will be administered through a designated branch(es) (hereinafter called the "Link Branch(es)").

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b. The prospective groups of farmers will be finalized by the Agent whose receivables will be financed by the Bank. Receivable here connotes the rearing charges to be paid by the companies to the farmers. c. A line of credit will be approved for the Agent depending upon the total sales, number of birds reared and rearing charges paid during the last one year. Previous years operation / price in this regard will be taken for consideration for fixing the line of credit. d. The amount of the line of credit so determined will be disbursed through a separate specified ACC account for onward payment to the farmer - borrowers by the Agent. The payments to the farmers will be made by way of cheques mentioning the borrowers bank account to be credited. e. The Agent, at stipulated intervals, will submit necessary proof to the Bank of having disbursed the amount. The proof will be by way of disbursal record. f. A farmer can have multiple disbursements, as the loan amount is dependent upon the supply of broiler birds to the poultry companies after specified number of days of rearing. The maximum limit sanctioned per farmer will not exceed Rs 1 lac. Accounting Procedure a. The disbursal of the Line of Credit will be through a specified account to be opened at the Link Branch as an ACC account. b. The specified ACC account will be styled Poultry Farmers Receivable A/c M/s. (Name of the poultry company). A cheque book will be issued to the Agent. The payments to the farmers will be made by way of cheques mentioning the borrowers bank account to be credited. c. Management & Collection Agent's fees (0.05 to 0.10%) will be paid by the Link Branch by debit to their Branch Charges Account. Role of the Agent The Agent will be responsible for undertaking the following acts :

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a. Selecting the farmers to be covered under the scheme, who should also be farmers registered with them and should be their regular suppliers of poultry. b. Assisting the farmer to furnish all the information as required by the Bank and ensuring that the borrowers execute all security documents as may be required by the Bank. c. Making onward payment to the prospective/identified farmer equivalent to the value of the rearing charges based on the number of birds supplied and the rates mutually agreed upon between the farmer and the poultry company from the Special Account maintained at the Link Branch. d. Acknowledging that such receivables stand hypothecated to the bank as evidenced by the loan document executed by borrowers. e. Ensuring that payments when due are remitted to the Bank for liquidation of the loans against such receivables. f. Ensuring payment of receivables to the Bank at the earliest (max. 60 days). Role of the Bank There will be two branches of the Bank, which will be involved in the scheme: the Nodal branch, and the Link branch. Nodal Branch Identification of the poultry companies for acting as Agent. Appraisal and assessment of the Line of Credit to the "Agent". Obtaining the Administrative approval from the competent authority for the Line of Credit. Advising the Agent about the basic eligibility criteria for any farmer to avail the Loan Facility from the Bank. Arranging documentation for the Line of Credit with the identified Agent Handholding the Link Branch until the arrangement stabilises. Bi-monthly visit to the Link Branch and poultry companies for supervising the operation of the scheme.

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 The unit should draw the PDCs on the Cash Credit account with the nodal branch. The total disbursement from the link branch will be advised by the Link Branch to the nodal branch on a daily basis and payment of PDC on due date shall be the responsibility of the nodal branch. The liability on account of the PDC has to crystallize on the MCA. The liability on account of the PDCs should be crystallised on the unit acting as MCA by debit to the units CC A/c on the due date, regardless of availability of DP in the account. Link Branch Maintaining the Line of Credit account of the Agent Sanction of loans within branch powers to farmers identified by the Agent Release of the line of credit to the Agent _ Follow up for recovery with the Agent. Wherever the farmers have availed of term loans from the Bank, the installments due to the Bank could be appropriated at source. Obtention of Post Dated Cheques (PDCs) and sending to the nodal branch to ensure timely liquidation of the Line of Credit. Follow up for recovery with the Agent. The nodal branch as well as the link branch should ensure the end use of funds. Delegation of Financial Powers a. The line of credit which will be treated as equivalent to sanction of credit facilities will be approved by the respective authority/committee. b. The individual loans to the farmers identified by the Agent will be sanctioned by the respective Branch Managers of the Link Branches within their financial powers for sanction of Working Capital Loans. The limit sanctioned per farmer by link branch will be based on, inter alia,

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(i) area of the poultry shed used for broiler farming and number of birds reared in each batch/ cycle. (ii) rearing charges per bird as per the model scheme approved by the Circle for broiler farming and agreement entered into between the farmer and the poultry company as a model of contract farming. (iii) loan margin of 20% (iv) The working capital will be sanctioned for a period of one year, but each withdrawal by the farmer will have to be liquidated within 60 days. Repayment The Line of Credit will be liquidated by the Agent through Post dated cheques. No Dues Certificate Not required as the bank finance is against the receivables of the farmers only. KYC Norms KYC will be the responsibility of the Link Branch from where the individual limits to farmers are sanctioned. Advantages A. To the Company:a. Immediate payment of rearing charges of birds to the farmers, thereby ensuring better loyalty of farmers. b. Enhanced reputation of the poultry companies. c. Faster payment will induce new poultry farmers to the company, which will help the company in expansion plans and enhancing sales volumes. B. To the Farmer a. Immediate payment, b. Incentive for increasing the production capacity. C. To the Bank: a. Loans under this scheme will be treated as Agricultural advances. b. High value advance with low transaction and supervision cost. c. Enhancement in the customer base of the branch, which can be used for selling/cross selling our various products, increasing deposit base and other income of the Link branch.

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Documents a. Management and collection Agent Agreement with the Agent(To be retained at the Nodal Branch) . b. Agreement for Loan and Hypothecation of Receivables to be executed by farmers (maximum 20 farmers at a time). (To be retained by the Link Branch) c. Guarantee agreement (Corporate Guarantee if Agent is the Company) to be executed by the MCA. (To be retained at the Nodal Branch) Security Primary : Hypothecation of receivables of farmers. Collateral : Indemnity by the Agent against non-payment Post Dated Cheques (PDCs) Guarantee by the MCA Processing Charges As applicable. Circle may exercise its discretion in the matter. Inspection Will be part of the inspection function of the Nodal branch Interest The rate of interest will be 2% below PLR STATE BANK ADVANCE RATE. Risk factors and their mitigation Risk factor Mitigation The agent can show inflated rearing charges per bird paid to the farmers so as to increase the line of credit. Market rate charged by other similar companies will be ascertained at the time of appraising the line of credit. The payment to the farmers can be delayed by the agent. Companies with good payment record to farmers will only be identified as agents.

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6. KISAN GOLD CARD SCHEME (KGC)

KGC is a general-purpose loan meant for meeting credit needs of farmers for productive and consumption purposes. 1. Objectives : To benefit the farmers having an excellent repayment record. Farmers have the choice in regard to amount, time, purpose including consumption needs. 2. Eligibility : All farmers irrespective of the size of their land holdings. Farmers having good track record of repayment in their ACC/ATL/KCC accounts for the last two years as on the date of application. (Repayment upto 6 months after the due date (in case tie-up loans). Farmers who have closed their accounts without any default but are not our current borrowers may be covered. Farmers who have defaulted in repayments but liquidated their dues within the stipulated repayment period may also be covered. New borrowers who maintain sizeable deposit with our branches for the last 2 years. Good borrowers of other Banks are also eligible provided they liquidate their outstandings with other Banks. In case of loans rescheduled on a/c of natural calamities Revised repayment to be considered to ascertain the position of the account as Standard. 3. Purpose :

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Investment credit : 80% of the eligible limit can be utilized for creation or purchase of any productive assets other than for purchase of land, construction of farm house and purchase of tractor & its accessories.

Consumption loans : To meet domestic expenses like Childrens education, marriage, medical expenses etc., 20% of the eligible KGC limit can be given as loan for consumption purpose. The consumption limit has to be arrived at as 20% of the eligible overall KGC limit before deducting the outstanding in the existing Agricultural Term Loans if any. 4. Quantum of Loan :

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. 5. Margin : Limits availed for Investment Purpose : 10% Limits availed for consumption Purpose : 30% 6. Validity Period : One year, can be renewed year after year / Default in repayment of instalments render the borrower ineligible for any further withdrawals. Borrower has to avail the limit sanctioned within one year. 7. Repayment : Each loan will have its own repayment schedule depending on the convenience of the farmer, subject to the usual norm of a maximum of 6-7 years for the repayment of Agricultural Term Loan. However, the limits availed for setting up of Horticultural orchards can be repaid over a period of 9 years from the date of sanction. 8. Security & Documentation: CARE : A single set of loan documents have to be obtained for the entire KGC limit sanctioned. However, in those States where Stamp Duty is payable

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for Agri loan documents, a maximum of five sets of documents can also be obtained depending upon the number of purposes. 9. Interest Rate : As per extant instructions under direct agricultural advances. 10. Insurance : As applicable to ATL accounts. 11. Operational Procedure : There is also no need for a separate viability study/statement as the overall credit limit is linked to the farmers annual income / land holdings. No double finance for the same purpose. Farmer should inform the branch regarding purpose of drawal of funds. Drawals can be in instalments as and when required.

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SECURITY AND DOCUMENTATION KGC LIMIT

SECURITY

DOCUMENTS OBTAINED

TO

BE

Upto Rs.50,000/-

PRIMARY COLLATERAL Hypothecation of assets Nil created finance out of bank

Simplified

Hypothecation

Agreement (AB-1 Sim) in local language. One page Letter of Arrangement over Simplified Hypothecation other Agreement (AB-1 Sim) in local language. Guarantee Agreement (AB2) and/or Mortgage Deed (AB-3) as the case may be One page letter of

Rs.50,001/Rs.1,00,000/-

to Hypothecation of assets Mortgage/Charge created finance out of bank land (or) any tangible security

Above Rs.1,00,000/-

arrangement. Hypothecation of assets Mortgage/ Charge over Hypothecation Agreement created finance out of bank land (or) any other (AB-1) Guarantee agreement (AB2) and/or Mortgage Deed (AB-3) as the case may be Arrangement Letter tangible security

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. identity card cum- pass book with his photograph affixed therein together with the usual details like name, address, limit sanctioned and date of sanction as in the case of KCC.

A farmer, whose application for the KGC is approved, will be issued an

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Verification of end use - Branches have to ensure the end use of funds by verification of assets and collection of invoices/cash receipts, within one month from the date of release of the funds. Suitable record of inspection and documents has to be kept and made available during audits. 12. Accounting Procedure : Treated as ATL accounts. For each farmer, the ledger will have a control card followed by different account sheets for different loan availed. (for control purpose) Consumption purpose ATL is treated as Clean Term Loan. (No primary security) Cash disbursals are allowed to the full extent of credit limit as in the case of KCC.

WORKING EXAMPLES FOR ASSESSING ELIGIBLE LIMIT UNDER KISAN GOLD CARD
Name of the Farmer : Shri. KISAN Ex. I : Income from crop production Rs. 60,000/- * Income from Allied Agrl. Activities like Dairy, Poultry etc. Rs. 30,000/Total Income Rs. 90,000/Value of land to be mortgaged, say 4 acres @ Rs. 1 lac per acre : Rs. 4,00,000/-

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Calculation of KGC Limit : (A) Based on Income : Rs. 90,000/- X 5 = Rs. 4,50,000/-. (B) Based on value of land mortgaged (50%) = Rs. 2,00,000/-. Eligible KGC limit = Rs. 2,00,000/Eligible consumption sub limit is 20% of Rs. 2,00,000/- = Rs. 40,000/-. Ex : II If Mr. Kisan is having an existing ATL (say for land levelling) with a limit of Rs. 1lac and the present outstanding is Rs. 40,000/-. Then, The eligible KGC limit will be = Rs. 2,00,000 Rs. 40,000 (o/s in ATL) = Rs. 1,60,000 But, eligible sub limit for consumption purpose will be 20% of Rs. 2,00,000 = Rs. 40,000. Mr. Kisan can utilise the remaining limit Rs. 1,20,000 : [i.e. Rs. 1,60,000 Rs. 40,000] for four other Purposes. (i.e. on-farm investment needs) * Income has to be assessed based on the crop(s) raised, total yield and the rate per quintal (or) tonne of the crop(s).

7. SETTING UP OF AGRI-CLINIC & AGRI BUSINESS CENTRES

OBJECTIVES : To augment support and extension services for agriculture. To provide a package of soil and input testing facilities and other consultancy services. To strengthen transfer of technology and extension of services.

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 To provide self employment opportunities to technically trained persons. ELIGIBILITY : Agricultural graduates / graduates in subjects 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. LIST OF VENTURES: 1. Soil and water quality cum inputs testing laboratories. 2. Post surveillance, diagnostic and control services. 3. Maintenance, repairs and custom-hiring of agricultural implements & machinery of micro irrigation system. 4. Agri service centers including the above 3 activities (group activities) 5. Seed processing units. 6. Micro propagation through plant tissue culture lab & hardening units. 7. Setting up of vermiculture units, production of Bio-Fertilisers, Bio-Pesticides (Bio control agents) 8. Setting up apiary (bee keeping) & Honey, Bee Products, processing of units. 9. Provision of extension, consultancy services. 10. Facilitation and agency of Agri. Insurance Services 11. Hatcheries and production of Fish-Fingerlings for Aquaculture. 12. Provision of livestock health cover, setting up veterinary dispensaries & services including frozen, Semen Banks & Liquid Nitrogen supply. 13.Setting up of information technology kiosks in rural areas for access to various agriculture related portals. 14. Feed processing and testing units. 15. Value addition units. 16. Setting up of cool chain from the farm level onwards (group activity)

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17. Post harvest management centers for sorting, grading, standardization, storage and packaging. 18. Setting up of metallic / non-metallic storage structure (Group Act) 19. Retail marketing outlets for processed Agri products. 20. Rural marketing dealership of farm inputs and outputs. Any combination of 2 or more above viable activities along with any other economically viable activities selected by the graduates, which is acceptable to the bank Delivery of extension services shall be the main component of ACABC projects for availing of the benefit of subsidy under the scheme. Commercial activities in agriculture and allied sectors may, on a case by case basis, be considered as eligible component of ACABC projects with a view to improve their viability. Coverage Under Credit Guarantee Fund Trust for Small Industries (CGFTSI) : Out of the 20 activities listed above, nine of those activities at serial numbers 3, 4, 5, 6,7, 8, 13,14 and16 are covered under the CGFTSI scheme. PROJECT COST: Individual Activity Rs.10 lacs Group Activity Rs.50 lacs (maximum). 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. INTEREST: As applicable to agricultural advances. MARGIN : Upto Rs. 5.00 lacs - NIL Above Rs. 5.00 lacs - 15 - 25% (depending upon the purpose and quantum and subject to NABARD requirements where refinance is contemplated)

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FACILITY: Ag. Term Loan DOCUMENTATION : As applicable to ATL. 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. The repayment schedule should be drawn on the total amount of loan (including subsidy) in such a way that the subsidy amount is adjusted after liquidation of net bank loan (excluding subsidy). TRAINING & SELECTION PROCESS : MANAGE (National Institute for Agricultural Extension Management) in Hyderabad is responsible for providing training to eligible candidates, through its nodal institutes and motivating them for setting up of ACABCs. MANAGE will also ensure sponsoring of sufficient number of loan applications. REFINANCE : By NABARD 100 % SOFT LOAN ASSISTANCE : 50 % of margin to be contributed by the applicant is provided by NABARD as Soft loan without any interest. However, branches can charge 2% of this amount as service charge per annum from the borrower. SUBSIDY : Credit linked capital subsidy @25% of the capital cost of the project funded through bank loan would be eligible. This subsidy would be 33.33% in respect of

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borrowers belonging to SC, ST, women and other disadvantaged sections and those from North-Eastern and Hill States. In addition to the above subsidy, full interest subsidy would be eligible for the first two years of the project. The capital subsidy will be back-ended with minimum 3 years lock-in period. The interest subsidy would, however, be concurrent. Subsidy Administration: The capital subsidy admissible under the scheme will be kept in the Subsidy Reserve Fund Account (Borrower-wise) in the books of the financing bank. No interest will be paid on this by the bank. In view of this, for the purposes of charging interest on the loan component, the subsidy amount should be excluded. Interest subsidy shall be provided for a period of first two years of bank loan, as per the net outstanding balance in the account. The bank should levy interest on annual basis and claim interest subsidy accordingly during this period. The benefit of subsidy will be extended only once. If the applicant has availed any subsidy from Central or State Government under any other scheme, he/she will not be eligible for subsidy under ACABC. The capital and interest subsidy would be admissible only if all the repayments till date had been made as per schedule. The scheme has been extended for the financial year 2008-09 also. The advances are to be classified now under Indirect Agricultural Advances.

8. LAND PURCHASE SCHEME

1. Objectives: To assist Small & Marginal farmers and landless agricultural labourers for purchase of land, who are our existing borrowers to consolidate land holdings & development of wasteland & fallow lands. 2. Eligibility : Small & Marginal Farmers, Tenants Cultivators, Share Croppers and Landless Agricultural Labourers. "Small Farmers" should be identified as per definition

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evolved by NABARD in an "area specific manner" based on "pre-development income" of the farmer (vide NABARD Ref. No. NS.EXPD.1950/SP-03-84 dt. 37-1984.) The borrowers should have a record of prompt repayment of the loan for at least two years. A margin of two months from the due date is however, allowed for the purpose of assessing promptitude of such repayment. Wherever tie-up arrangements are available the margin may be extended upto 6 months as the companies delay payments and it is beyond the control of the borrower (e.g. sugar mills). However, the existing stipulation that the account should be a standard asset should be complied with. Good borrowers of other Banks may also eligible provided they liquidate their outstandings to other banks. 3. 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) 4. Valuation of Land : For the purpose of the valuation of the land to be purchased, the price indicated by the former may be cross checked with the last 5 years' average registration value available with the Registrar/Sub-Registrar of the area and a view is to be taken by the Bank for fixing the Quantum of finance. 5. Margin : Minimum margin of 15% 6. Gestation period :

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 1-2 years :If it is to be developed. 6M-1year:Developed land 7. Repayment period : Max. 9-10 years beginning after the expiry of gestation period, with half-yearly installments. 8. Quality of land: Avoid submerged lands, lands depending solely on monsoon rain etc. 9. Verification of title: Discreet enquiries to be made besides usual scrutiny of documents. 10. Rate of Interest: As applicable to ATL a/cs. 11. Security: To be secured by way of mortgage of land to be purchased.

9. SCORING MODEL FOR TRACTOR LOANS

Tractor advances constitute one of the major portfolio under agriculture segment. To counter the competition as well as to tackle NPAs, a revised scoring model for sanction of tractor loans has been introduced. With the introduction of this, the existing Tractor Plus scheme stands withdrawn.

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Purpose :To provide finance for purchase of new tractors, accessories and implements so as to enable the farmers to improve crop productivity by utilizing them on their own farm as well as to use it for custom hiring. Features of Scoring Model : (i) The scoring model (given in the annexure) is simple and time saving, at the same time removing the subjectivity in the appraisal. (ii) It has provision for differential margin, security, interest etc. based on the marks secured. (iii) Risks have been grouped under two : Borrower Risk Characteristics are assigned 56 marks and Transaction Risk Characteristics, 44 marks, making a total of 100. (iv) For arriving at the final score, Branch NPA percentage in tractor loans is to be factored (as per annexure), thus allowing only good business to accrue while keeping possible NPA accounts at bay. (v) Good proposals, obtaining score above 60, will not come under the purview of Branch NPA factoring of the score obtained, thereby the possibility of their going past us is precluded. (vi) Hurdle rate is 40 marks. (vii) Tractor financing hereafter must be done only under this scoring model and not under KGC. (viii) General branches should desist from financing tractors (to obviate NPA factoring), if there is a branch doing agri finance, as a regular business in the same centre. Eligibility : Agriculturists (individually or jointly ) Persons offering security like NSCs, KVPs, the Banks Fixed Deposits, surrender value of LIC policy, etc. to cover more than 60% of the loan amount, are treated as Very Low Risk and Highly Secure. Gold can also be obtained as security, with the approval of Controllers.

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 Hurdle rate under the scoring model is 40. In case any branch considers that a particular proposal, securing less than 40 marks, is a sound banking proposition, based on its reasoned recommendations, CM(AG/CSC) will sanction the advance and it will be controlled by AGM(Region). For branches falling under Rural CPCs, these tractor proposals may be sanctioned by Head of Rural CPC and controlled / noted as per approved mechanism for Rural CPC by AGM concerned. Quantum of Loan: The quantum of loan will be based on the invoice price of the tractor, trailer and implements less margin stipulated in accordance with the score secured. The sanctioned limit may include registration charges and insurance premium (provided the borrower opts for comprehensive insurance) not exceeding Rs 15,000/-. Additional loan equal to 10% of tractor loan for repairs may be provided for at the time of sanction. Bank has modified the tractor loan product, where the existing 10% provision in the tractor loan along with tractor financing is withdrawn & another new product TRACTOR UPGRADATION (SANJEEVANI) is introduced to meet the requirements of maintenance, upgradation , refurbishment as well as for addition of new implements. This product will be made available only to : STANDARD & SATISFACTIRILY CONDUCTED ATL accounts customers.. The tractor upgradation CIF number. Repairs upto a max. of Rs. 50000/= Addition of new implement =up to a max. of Rs. 1 lac. The loan limit should be to the extent by which the existing loan has been reduced. (CHANDIGARH LHO CIRCULAR NO.CIRCFO/ADV/227/2009-10 DTED 15.12.2009 /ABU/PD&M/CIRCULAR-13/2009-10 DATED 27.11.2009) There are very low HP tractors available in the market and the cost of such tractor units with implements/trailers more or less match with the cost of power tiller SANJEEVANI IS MADE AVAILABLE AFTER AN INDEPENDENT APPRAISAL. A separate term loan has to be opened with same

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units. In such case of very low / low HP tractor units the loan amount may not exceed Rs 1.50 lakh. Branches may sanction such loans with scoring model or in accordance with the guidelines for financing power tillers with suitable modifications in norms covering insurance, registration etc. Margin : Margin varies from 5% to 20%, depending on the scoring as well as DSCR. Marks scored Score of 8 under item 1 of Transaction Risk Characteristics Not Applicable 60 and above Between 50 and 59 49 and below annexure). However, in case where the score secured is less than 60, DSCR has to be calculated to arrive at the eligibility. Documentation: AB 1, AB 2, AB 3/3A, Arrangement letter Form A, A-1, A-2, as the case may be. Blank and undated Forms HPTER and TTO to be obtained in duplicate, duly signed by the borrower. Disbursement : The loan amount along with the margin money should be paid directly to the manufacturers / authorized dealers / suppliers of tractors, against the invoice obtained. Security : Primary : Hypothecation of the tractor, accessories and implements. Noting of Banks hypothecation charge in the RC Book of the tractor is compulsory in all the cases. Collateral : Not Applicable 1.75 and above 2.00 and above 5% 5% 10% 20% DSCR Margin

Appraisal: This will be done only through scoring model (as given in the

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Marks scored Security Score of 8 under item 1 Security like NSCs, KVPs, the Banks Fixed Deposits, of Transaction Risk surrender value of LIC policy, etc. to cover more than 60% of the loan amount. Gold can also be obtaine3d as security with the approval of Controllers. No collateral Mortgage of agri lands owned by the farmer of other tangible security, good for the market value of land owned. Between 50 and 59 and Mortgage of agri lands owned by the farmer or other DSCR is 1.75 and above tangible security, good for the market value of land owned. Between 40 and 49 and Mortgage of agri lands DSCR is 2.00 and above tangible security, good owned. Below 40 and DSCR is Mortgage of agri lands 2.00 and above tangible security, good owned. owned by the farmer or other for the market value of land owned by the farmer or other for the market value of land Characteristics 70 and above Between 60 and 69

Interest: Marks scored Interest Score of 8 under item 1 1.5% below stipulated interest rate for tractor loans of Transaction Risk Characteristics 70 and above 1% below stipulated interest rate for tractor loans Between 60 and 69 0.5% below stipulated interest rate for tractor loans Between 50 and 59 and Actual below stipulated interest rate for tractor loans DSCR is 1.75 and above Below 50 and DSCR is Actual below stipulated interest rate for tractor loans 2.00 and above

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Insurance : Comprehensive insurance can be obtained for tractor, accessories and implements, if the applicant (borrower) so desires. However, this may be waived after obtaining consent of the borrower(s) on the prescribed format in view of the low incidence of insurance claims in the past. However, third party insurance should invariably be taken. Upfront fee : Loan amount upto Rs.2,00,000/- : NIL Loan amount 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. The instalments shall be payable half-yearly / yearly, coinciding with the harvesting and marketing period of the crops proposed to be grown by the borrower.

Inspection : =Pre Sanction Survey -------Information / data furnished is to be verified. =Post disbursement inspection ------Within one month of disbursement. Creation of the asset to be invariably ensured and recorded. =Regular loans (any amount) -----Inspection once in six months for verification of asset (preferably at harvest time) will suffice. However, the branch officials should maintain contact with the borrower on an ongoing basis, at least once a quarter. == Irregular loans (any amount)---- Monthly visits for recovery should be undertaken. Other instructions : 1. As regard to net Agricultural income, assessment of the sanctioning /recommending authority to be made after discrete enquiry would be sufficient. No

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income certificate from local authority/outside agency to be insisted upon. If the applicant has regular stable income other than agricultural income, the same should also be reckoned for the purpose. 2. In case of joint borrowers, aggregate land holding of all borrowers may be considered. Similar treatment be given to other parameters wherever applicable viz. income, family size, tangible/liquid security etc. 3. While arriving at the age of the applicant(s) average age of all the borrowers including co-borrowers be taken. 4. As regards family size, dependant family members (including the borrower) should only be reckoned. 5. Field officer/recommending official should not refuse to accept the proposal or reject the same at his/her level. The decision in this regard, be taken by appropriate sanctioning authority as per extant instruction. 6. If on a particular parameter the borrower(s) does not qualify for any score, the score should be treated as zero under that particular parameter.

7. Noting lien in the Books of Regional Transport Authority (RTA) : Branches should notify the lien as a financer to the RTA and get the lien noted in the Registration Certificate (RC) Book of the tractor / trailer. A certificate to this effect should also be obtained from the RTA. Branches should ensure by verifying the RC book within a period of 15 days from the date of disbursement of the loan or the reported delivery of the tractor to the borrower(s), whichever is later, that the registration of the tractor is done in the borrowers name and the Banks lien noted therein is only as a Hypothecatee and not as a joint owner. 8. Approved Models: Branches can finance only for those models of tractors which have completed the commercial test from organisations viz. Central Farm Machinery Training and Testing Institute (CFMTTI) Budni (Madhya Pradesh) or Farm Machinery Training

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and Testing Institute (FMTTI), Hissar. The list of such tractors is being circulated from time to time. (Ref : Cir. No.ABU/PD&M-4/Circular-24/2006-07 dated 30.03.2007, ABU/PD&M-4/077 dt. 29th May 2007, ABU/PD&M-4/109 dt. 12th June 2007ABU/PD&M-4 dt. 26th June 2007, of ABU, Corporate Centre)

Annexure - I
SCORING MODEL FOR TRACTOR LOANS (Maximum Marks = 100)

A. Borrower Risk Characteristics S.No Particulars 1. Marks Marks scored allotted Applicant owns 10 acres of perennially 14 irrigated lands or more Applicant owns > 8 acres but below 10 acres of perennially irrigated lands Applicant owns > 6 acres but below 8 acres of perennially irrigated lands Applicant owns > 4 acres but below 6 acres 12 09 06

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2.

of perennially irrigated lands Present net agricultural income from all sources after deducting existing repayment obligations also Applicant has income above Rs.2.50 lacs Applicant has income above Rs.2.00 lacs upto Rs.2.50 lacs Applicant has income above Rs. 1.50 lacs upto Rs.2.00 lacs Applicant has income above Rs.1.00 lacs 14 12 09 06

upto Rs.1.50 lacs Family size Size of the applicants family upto 4 members > 4 upto 6 members > 6 upto 8 members

06 04 02

4.

Age of the borrower Age of the borrower between 25 and 45 years Age between 45 to 55 years Age between 55 to 65 years Frequency of tractor ownership Owned tractor earlier 2 times and more Owned tractor once earlier Status as farmer Applicant is a highly progressive farmer Applicant is progressive farmer Sub-total (Borrower Risk Characteristics Maximum)

06 04 02 10 06 06 02 56

5. 6.

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B. TRANSACTION RISK CHARACTERISTICS

S.No Particulars 1. Tangible Liquid Security Applicant offering as security other tangible assets like NSCs, KVP, the Banks FDs; Surrender value of LIC policy (Gold with the approval of controllers), etc. To cover > 60% of the loan amount To cover 50 to 60% of the loan amount To cover 40 to 50% of the loan amount To cover 30 to 40% of the loan amount Deposit Characteristics Applicant has average deposit connections of more than Rs.2 lacs for last one year or more Applicant has average deposit connections of above Rs.1 lac but upto Rs.2 lacs for last one year or more Applicant has average deposit connections of above Rs.0.50 lac but upto Rs.1 lac for last one year or more Applicant has average deposit connections of above 3. Rs.0.20 lac but upto Rs.0.50 lac for last one year or more. Crops grown Applicant grows cash crops on entire land holdings (high income crops to be decided by controller for each area bases on crop performance in the past few years) Applicant grows cash crops on more than 75% of the area 06 06 04 02 08 06 04 02 Marks allotted 08 Marks scored

2.

08

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but less than 100% of the area. Applicant grows cash crops on less than 50% of land 4. holdings Conduct of Account Applicant is an existing borrower and has not defaulted in the past five years. Applicant is an existing borrower but had defaulted once in the previous five years Applicant is an existing borrower but had defaulted twice in 5. the previous five years. Mortgage Cover Market value of the land offered as security covers more than 200% of the loan amount Market value of the land offered as security covers more than 150% of the land amount (but less than 200%) Market value of the land offered as security covers more than 100% of the loan amount (but less than 150%) Market value of the land offered as security covers more 6. than 75% of the loan amount (but less than 100%) Hiring Potential The area has high potential for custom hiring The area has medium potential for custom hiring Sub-total (Transaction Risk Characteristics) Maximum GRAND TOTAL (A+B)

08 06 04

08 06 04 02

04 02 44 100

In case of joint borrowings, the score card will be prepared taking a view in totality.

C. Formula for factoring in the NPA (Tractor Loans)

NPA % (Tractor NPA Factor NPA % (Tractor NPA Factor

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Loans) at the Branch > 20 20 19 18 17 16 15 14 13 12 11

0.02 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50

Loans) at the Branch 10 9 8 7 6 5 4 3 2 1

0.55 0.60 0.65 0.70 0.75 0.80 0.85 0.90 0.95 1.00

Arriving at the final score for assessing the eligibility of the farmer : Marks scored (Grand Total A + B) x NPA factor Factoring of NPA will not be applicable, if the score is 60 or more. While collecting and analysing of data / information for awarding marks on the following parameters, the Appraising Officer should not follow the undernoted practices for improving scoring. a. Family Size To improve the score awarding full marks without making proper enquiries. b. Age of the Borrower Awarding more marks to the applicant. c. Frequency of Tractor Ownership While taking credit decision, repayment track record of tractor loan(s) availed earlier by the applicant(s)/borrower(s) is not considered. d. Status as Farmer - All applicant(s) for tractor loan is/are being treated as progressive farmers and full marks given. (Careful enquiries need to be made regarding the level of technology adopted by applicant(s) for cultivation of crops before allocating the marks).

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e. While awarding marks for high income crops, branches award maximum possible marks without following the list of high income crops grown in the area circulated by the Controllers.

10. FINANCING OF SECOND HAND / USED TRACTORS

SCHEMES : SBI - Mahindra Vishwas SBI TAFE Nayaroop

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OBJECTIVES : To enable farmers with smaller land holdings to mechanise their farms To increase business under agriculture To serve the small and marginal farmers by providing them with good quality second hand tractors. PURPOSE : Agriculture Term Loans for the purchase of second hand tractors refurbished by Mahindra & Mahindra and Tractors & Farm Equipments Ltd. Tractors which are up to 7 years old can be financed. Authorised branches : All the branches dealing in agricultural finance. ELIGIBILITY : Individual farmer or a group of farmers not exceeding three in number (as coborrowers) owning minimum 3 acres of perennially irrigated agricultural land. In case of co-borrowers the land should be in same area as is being stipulated for financing new tractors. Economic use of tractor : Minimum of 600 working hours per annum. Valuation of the tractor and Quantum of Finance : The loan amount in the case of each of the companies will be based on the price fixed by the company for each tractor after refurbishing. The overall maximum limit will be Rs.2.50 lac including the cost implements. The implements purchased shall be new. Margin : 15% on the cost of tractor and implements. Discretion to relax financing norms : The sanctioning authority is vested with the powers to reduce the margin to a min. level of 5%. Age of the tractor : Tractors which are more than 7 years from the original purchase date shall not be financed. Benefits to the Farmers :

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1. The old / second hand tractor will be refurbished by a reliable company. 2. The second hand tractor will carry with it a certification from the company regarding the condition of the tractor. 3. The company extends a warranty for such refurbished tractors. 4. Some labour free services are also provided by the company. 5. Companies provide rebate on the purchase of spare parts after sale of the tractor. Security : Up to Rs.50,000/- Hypothecation of tractor and accessories Above Rs.50,000/Primary: Hypothecation of tractor and implements. Collateral : Mortgage of the land of the farmer or any other tangible security to cover atleast 50% of the loan amount or suitable third parry guarantee on selective basis. DOCUMENTATION : As per documentation for new tractor financing. The deal shall be between the company and the borrower and hence an Authority Letter from the borrower to make the payment to the company / dealer shall be taken. DSCR (min) : 1.75 Disbursement : Direct payment to the supplier of the tractor. Rate of Interest: As applicable to ATLs. Discretionary powers : As per discretion vested under the scheme of delegation of powers for tractor finance. GENERAL CONDITIONS : 1. The purchaser (borrower) should either own a minimum of two equipments or the branch should finance the same along with the second hand tractor. 2. The tractor financed should be on the approved list of tractors. REPAYMENT SCHEDULE :

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The loan amount including interest shall be repayable In half-yearly installments or yearly installments coinciding with the harvest of crops grown by the farmer. The repayment of 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.

REPAYMENT CHART FOR SECOND HAND TRACTOR

Sl. No Age of the tractor from the date of original Maximum purchase (to be ascertained from R.C. period 1. 2. 3. 4. 5. 6. book) Tractors upto 2 Years old Tractor above 2 Years old and upto 3 Years Tractor above 3 Years old and upto 4 Years Tractor above 4 Years old and upto 5 Years Tractor above 5 Years old and upto 6 Years Tractor above 6 Years old and upto 7 Years repayment of

inclusive

gestation period. 7 years 6 Years 5 Years 4 Years 3 Years 3 Years

INSURANCE : Comprehensive Insurance shall be obtained wherever the borrowers are willing to pay the premium. However, third party insurance for the tractor to be obtained after obtaining the consent of the borrower. (vide a letter of undertaking).

11. FINANCING POWER TILLERS

ELIGIBILITY : a. Farmers or a group of not more than 3 farmers owning 2 acres of perennially irrigated land ( contiguous / nearby) or corresponding acreages of semi irrigated /

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dry land prescribed in the Land Ceiling Act are eligible for availing loans for purchase of Power tiller. b. Farmers owning lesser acreage than that is prescribed above, also become eligible for availing Power tiller loans provided: i. DSCR work out to 1.75 and above. ii. If earning from custom hiring is considered, then it should be arrived at from the data built up by the branches on the average custom hiring earnings by power tiller already financed by the branch in the past. iii. The farmers are adopting intensive cultivation practices. Note: All such loans sanctioned as per item (b) above should invariably be reported individually to the Controller of the Branch in detailed control report. Controllers will carefully examine such reports from the point of view of viability of the scheme, thus ensuring that these loans do not turn into NPAs on account of improper calculation of profit generated. DSCR: The DSCR SHOULD NOT BE BELOW 1.75. Economics should be worked out by considering the crops grown by the farmers and expected income from custom hiring of the power tiller. LOAN AMOUNT : As per invoice less margin. MARGIN : A minimum margin of 10% on the total cost of power tiller plus accessories. The sanctioning authority will have the discretion to selectively reduce the margin to 5%. Minimum Work load : The earlier stipulation of minimum work load of 600 hours is dispensed with. SECURITY : a. For loans upto Rs.50,000/Primary : Hypothecation of Power tiller, accessories, implements and trailer purchased out of Banks finance. Collateral : Nil

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b. For loans above Rs.50,000 and upto Rs.2.00 lacs : Primary : Hypothecation of Power tiller, accessories, implements and trailer purchased out of Banks finance. Collateral : Registered or equitable mortgage/ charge on land. Value of such lands obtained as security, shall be atleast 50% of the loan amount. Or One third party guarantee, good for the amount involved. Or Any other acceptable collateral security like NSCs, Banks own term deposits, Kisan Vikas Patras, Indra Vikas Patras, gold, urban property, surrender value of LIC Policy ; the value of it should be atleast 50% of the loan amount. c. For loans above Rs.2.00 lacs : ( in the unlikely event of hike in cost of power tiller / accessories ) Primary : Hypothecation of Power tiller, accessories, implements and trailer purchased out of Banks finance. Collateral : Registered or equitable mortgage/ charge on land. Value of such lands obtained as security, shall be atleast 50% of the loan amount. REPAYMENT : Maximum 9 years with one year as gestation period. PROCESSING / UPFRONT FEE : Waived upto Rs.2.00 lacs. However, power tiller loan going beyond Rs. 2.00 lacs (unlikely in the near future), the AGM heading the region has been vested with the powers to waive upfront fee. INTEREST : As applicable to other ATL INSURANCE : General insurance cover as applicable to machinery finance has to be obtained. Wherever registration of trailer with Road Transport Authority is considered necessary, in such cases comprehensive insurance may be obtained if the party so desires or else Comprehensive Insurance may be waived by obtaining

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consent from the applicant(s), but, invariably in such cases third party insurance should be obtained. OTHER INSTRUCTIONS : Concessions available to the farmer borrowers from various power tiller manufacturing companies under tie-up arrangement with our Bank will continue. Rejection of application : By Controllers only Time to be taken for sanction : 2 weeks Certification : Only those models approved by Central Farm Machinery Training and Testing Institute (CFMT&TI), Budni (M.P) or Farm Machinery Training and Testing Institute (FMT&TI), Hissar are permitted to be financed. The list of such power tillers is being circulated by the Bank from time to time.

12. FINANCING FOR COMBINE HARVESTERS

Combine harvester is a farm machinery which accomplishes host of activities like harvesting, threshing, separating the grains from the straw, cleaning the grains and finally collecting / bagging the grains. There are two models of combine harvester. 1. Tractor drawn combine harvester.

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2. Self propelled (power and combine mounted together- Integrated unit) ELIGIBILITY & REPAYMENT : a. For self propelled Combine Harvester : 1. Farmers enjoying high credit- worthiness and in a position to operate the Combine Harvester successfully. 2. They should own minimum 8 acres of irrigated land (corresponding acreage for other types of land). 3. Minimum DCSR 1.75 including income from custom hiring ( assessed on a realistic basis, based on experiences of such units financed by the branch or branches in the area). 4. Farmers owning lesser acreage than that prescribed above, are also eligible for availing combine harvester loans provided items (1) & (3) as above are complied with and additional acceptable collateral security (NSCs, Banks own Term Deposits, Kisan Vikas Patras, Indira Vikas Patras, gold, urban property, surrender value of LIC policy) the value of which is at least 50% of the loan amount is obtained. All such loans can invariably be sanctioned by AGM (Region) only and the control report put up to DGM. Repayment : A repayment period of 9 years (including grace / gestation period, if warranted). The loan along with interest should be recovered in half-yearly installments. b. For Combine Harvesters as an attachment /equipment : i) Farmers enjoying high credit-worthiness and in a position to operate the combine harvester successfully. ii) They should own minimum 6 acres of irrigated land (corresponding acreage for other types of land). iii) Debt Service Coverage Ratio (DSCR) works out to 1.75 (minimum) including income from custom hiring (assessed on a realistic basis, based on experiences of such units financed by the branch or branches in the area).

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iv) Farmers should own a tractor of not less than 50 HP. v) Farmers owning lesser acreage than that is prescribed above, may also become eligible for availing combine harvester loans provided items (i) & (iii) as above are complied with and additional acceptable collateral security (NSCs, Banks own Term Deposits, Kisan Vikas Patras, Indira Vikas Patras, gold, urban property, surrender value of LIC policy) the value of which is at least 50% of the loan amount is obtained. All such loans are invariably sanctioned by AGM (Region) and the control report put up to DGM. Repayment : Repayment period of combine harvester (including gestation period) will be for a maximum period of residual economic life of the tractor owned which is assumed as 9 years. MARGIN : A margin of 15 - 25 % of the cost of combine harvester and accessories should be stipulated in all cases. Where possible, higher margin may be obtained having regard to the means of the borrower(s). SECURITY : PRIMARY :Hypothecation of the Tractor / Combine harvester along with accessories purchased out of Banks finance.. COLLATERAL :Mortgage of land / Buildings as applicable to other Agl. Term Loan Rate of Interest : As applicable to Ag. Term Loans DOCUMENTATION : AB - 1 = Hypothecation agreement AB-2=Deed of guarantee AB - 3 = Mortgage deed/ Declaratory charge /Equitable Mortgage Form 20,29& 30. INSPECTION : As per extant instructions Economic viability depends on the scope for custom hiring works which interalia depends on :

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 Density of population of combine harvesters Area under crops like wheat / paddy / soyabean etc. Scope of custom hiring works Impact on custom hiring rates. OTHER CONDITIONS: Loan should be granted to purchase new harvester only. Models approved by CFMTTI, Budni /FMTTI, Hissar only are to be financed. Loan component may include the cost of accessories, if any. Registration with RTA Banks hypothecation charge has to be noted with RTO and in the registration book. Comprehensive insurance cover has to be ensured and be assigned in Banks favour. A copy of the relative insurance policy has to be kept on record. LIST OF COMBINE HARVESTERS (APPROVED BY CFMTTI, BUDNI) 1. Standards 8300 4. AXIAS-514 10. Preet987 FMTTI, HISSAR) 1. Standars-S-365 4. V.K. 456 7. Standard-TSC-513 REFINANCE: Can be obtained in eligible cases from NABARD in all states. OTHER CONDITIONS FOR FINANCING FARM MACHINERIES 2. KartarKk-350 5. Standard -C-412 8. Dashmesh-913 3. BhodayDeluxe-470 6. Saggu - 630 9. S513TD 2. Kartar-4000 5. Class Dominator-68 SR 11. Amar930 3. Bharat-730 Deluxe 6. Standard C-412 9. Dasmesh9100

7. Standard C-514 8. Class Crop-Tiger

LIST OF HARVESTERS, TRACTOR MOUNTED : (APPROVED BY

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There are four general types of field implements based upon their relation to the power unit. a) A pull type or trailed implement is one that is pulled and guided from a single hitch point and is never completely supported by the tractor. b) A mounted implement is one that is attached to the tractor through a hitch linkage and is completely supported by the tractor. c) Semi-mounted implement is attached to the tractor through a horizontal axis and partially supported by the tractor. d) A self-propelled machine is one in which the power unit is an integral part of the implement. Different implements can also be classified based on their uses, such as a) Primary tillage equipments eg: Subsoiler, M.B. Plough, reversible plough b) Secondary tillage equipments eg: Disc harrow, cultivators, rakes c) Leveling equipment eg: Multipurpose blade, Leveler, Terracer etc. d) Planting equipment eg: Seed drills, planters, fertilizer drills, paddy trans-planter e) Plant protection equipments eg: sprayers, dusters f) Inter-culture operation equipments eg: Hoes, cultivators g) Harvesting equipment eg : reaper, thresher, harvester.

13. SCHEME FOR FINANCING FARM MACHINERY WHERE TANGIBLE ASSETS ARE CREATED
(OTHER THAN TRACTOR, COMBINE HARVESTER AND POWER TILLERS)

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The branches can extend finance as an Agricultural Term loan for purchase of farm machinery like implements, threshers, sprayers (both mechanical and motorized) bullock and cart etc. Where tangible assets are created, as per guidelines given here under: Objectives: Granting loans to agriculturists for purchase of implements and other tangible assets for improving the farming efficiency. Eligibility: All categories of farmers cultivating lands can be financed. Quantum of Loan: Loan amount would be cost of the asset to be purchased determined based on the estimate /quotation less stipulated margin. Margin: For Loans upto Rs. 50,000/- : Nil For Loans above Rs.50,000/- : 10 % Security: a. For loans upto Rs.50,000/i. Primary: Hypothecation of assets created out of Banks finance. ii. Collateral: Nil b. For loans above Rs.50,000/i. Primary: Hypothecation of assets created out of Banks finance. ii. Collateral: Mortgage/ charge over the land. In case of genuine difficulties in the creation of mortgage / charge over the land, branches can obtain third party guarantee or such other security considered as appropriate for loans upto Rs.1.00 lac only, after obtaining permission for waiver of mortgage / change on land from the controlling authority . Assessment of the Loan Sanctioning of loans should be based on assessment of DSCR, which should be a minimum of 1.75.

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Disbursement of Loan: The loan amount along with the margin contributed by the borrower(s) has to be disbursed directly to the supplier /dealer. Insurance: For loans upto Rs. 25,000/- : Obtention of insurance may be waived, except in the case of live stock, subject to the borrower(s) executing an undertaking to indemnify the Bank against any loss due to non-insurance. For loans above Rs.25,000/- all assets created / purchased have to insured as per extant instructions. Upfront fee: i. Loans upto Rs.2.00 lacs : Nil ii. Loans above Rs.2.00 lacs : As applicable to other agricultural advances. But this can also be reduced or waived at the discretion of the sanctioning authority. Interest: As applicable to Agricultural term Loans. Repayment: Loans sanctioned under the scheme should be repaid within a maximum period of 7 years in monthly / quarterly / half yearly / annual installments depending upon the cash accrual pattern. The repayment programme should be fixed taking into account the incremental income, sustenance requirements, life of the asset and after providing adequate gestation period.

14. SCHEME FOR FINANCING SECOND HAND MACHINERY

Branches were permitted financing for acquisition of imported second hand machinery only under the Banks Scheme as well as under Technology

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Upgradation Funds Scheme (TUFS). Now, financing can also be done for acquisition of second hand machinery manufactured indigenously subject to the following stipulations. The machinery should be a product by firms of repute, preferably with established brand name. The machinery should be got technically evaluated by a Chartered Engineer drawn from the panel maintained by our LHOs/IDBI. The Engineers Certificate, interalia should cover, the vintage of the machinery, minimum residual life, the present market value and the degree of obsolescence to which the machinery is likely to be exposed. Repayment period should be fixed by branches keeping in view the residual life of the machinery. In case of the machinery already under pledge/hypothecation a No Objection Certificate (NOC) should be obtained from the sellers bankers / FIs / NBFC. Otherwise, an affidavit by the seller has to be obtained to the effect that he is the true owner of the asset(s) and that no other entity has any charge or interest over the asset(s).

Machinery which has changed hands more than once should not be financed.

Other Stipulations : Branches should :a. Satisfy themselves that the machinery proposed to be purchased is prima facie, of good quality and the technology is relatively current. b. Ascertain the vintage after verifying the original sale documents of the machine equipment proposed to be acquired.

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c. Ensure that suitable arrangements for effective after-sales service of the machine are in place. Power Structure for Relaxation in Stipulation: On a case to case basis relaxations from the above stipulations can be considered on the basis of genuine and acceptable reasons.

15. DAIRY PLUS SCHEME FOR FINANCING DAIRY UNITS

OBJECTIVE : To improve quality production of milk at the farm level.

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 To finance milk producing members of AMUL pattern societies recognised private milk dairies posting profit in the past two years. To promote bulk financing in agricultural sector priority sector lending. PURPOSE OF LOAN : Construction of dairy shed Purchase of quality milch animals, milking machine, chaff cutter or any other equipment required for the purpose. ELIGIBILITY : Individual farmers who are members of AMUL pattern milk societies producing and selling milk to the society. Applicant should be less than 65 years of age. Individual dairy unit having less than 10 animal - should own minimum 0.25 acre of land for every 5 animals for growing fodder and be in a position to procure the balance requirements locally. Individual dairy unit having 10 animals and above - should own or lease a minimum of one acre of land for cultivation of fodder for every 5 animals. LOAN AMOUNT : A Term loan of Maximum Rs.5 lacs, without any sub-limits, can be sanctioned for meeting expenses related to purchase of milch animal, milking machine, construction of sheds and purchase of other equipments. WORKING CAPITAL: A working capital @ Rs.2500/- per animal per year may be sanctioned for purchase of feed, fodder and medicine along with the term loan, if it is not capitalized with the term loan component. However, total quantum of loan will be based on the repaying capacity. Min DSCR : 1.75 Margin : Loans upto Rs. 50,000/- :Nil Loans above Rs. 50,000/- and upto Rs.5 lacs :10%

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Security Primary hypothecation of assets created out of Bank finance. Collateral loans upto 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. Documents: As applicable to ATL Tripartite arrangement letter Bank Borrower Society

16. DAIRY SOCIETY PLUS SCHEME FOR FINANCING DAIRY SOCIETIES

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OBJECTIVES : (i) To improve quality milk production through modernization of dairy societies. (ii) To provide finance for creating infrastructure like : Construction of milk house or society office Purchase of Automatic milk collection system Purchase of transport vehicles. Purchase of Bulk chilling unit. (iii) To promote bulk financing in Agricultural sector-priority sector lending. ELIGIBILITY SOCIETIES 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 from other banks, if any - prior liquidation and no due certificate are necessary. Borrowing powers as per bye-laws of the Society. TYPE OF ADVANCE : Agricultural term loan (ATL) CLASSIFICATION : Indirect agriculture finance

LOAN AMOUNT : Maximum four times the average profit of previous 2 years maximum Rs 10.00 lacs.

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S.No. 1. 2. 3. 4.

Purpose Milk house or society office Automatic milk collection system Milk transportation Chilling Unit

Maximum loan limit Rs. 2 lakh Rs. 1 lakh Rs. 3 lakh Rs. 4 lakh

Margin : 15% Rate of interest : As applicable to ATL. DSCR : Min. 1.75 Appraisal & security : No separate appraisal is required as the loan amount is linked to profits of the society. Primary : Hypothecation of assets. Collateral : Mortgage of landed property (or) Guarantee of milk union. Documents : As applicable to ATL. 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. Prerequisite : Resolution to borrow from the bank.

17. BROILER PLUS

(Scheme for financing Broiler Farmers under Contract farming)

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OBJECTIVES : Branches in Chennai and Hyderabad Circles have been given instructions regarding financing broiler farmers under contract farming. Under this scheme loans can be 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. Branches in other Circles can also finance under the scheme after obtention of approval from the Circle heads. ELIGIBILITY: i. The applicant should have experience or had undergone training in poultry farming. ii. The farmers should possess adequate land for construction of poultry shed, which should be at least 500 meters away from any existing poultry farm. Potable water source should also be available. ECONOMIC FLOCK SIZE: The minimum flock size should be 5000 birds. However, financing can be done for 10,000 and 15, 000 birds or part thereof. A model scheme has also been circularized by the Bank. Rearing Period of birds : 7 weeks Margin : 25% Maximum Loan : Rs.9.00 lacs per farmer. Quantum of advance for 5000 birds. Total cost of the project (for construction of shed, feed room and purchase of equipments) Margin (27 % ) Bank Loan DSCR: 1.40 Type of Advance: Agricultural Term Loan Rate of Interest: As applicable to ATLs. Documentation: As applicable to poultry advances ie.,AB-1 Rs. 4.10 lacs Rs. 1.10 lacs Rs. 3.00 lacs

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Copy of Bi-partite agreement between the farmer and the hatchery as per the banks specimen Letter of undertaking to the Bank by the broiler integrator Security : Primary: Hypothecation of assets created out of Bank finance. 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 : The entire loan should be repaid along with interest within 5 years, inclusive of a grace period of 6 months, with installments at bi-monthly intervals. OTHER TERMS AND CONDITIONS: i. Working capital requirements are not considered as chicks, medicine, feed etc. are supplied free of cost by the hatcheries / broiler integrators. ii. Growing charges should be routed only through the lending branch by the hatcheries. iii. Hatcheries / Broiler Integrators should provide related books to the farmers for maintaining the farm records. iv. The farmers should record batch- wise performance and submit a copy to the financing branch, for assessment of the physical and financial health of the unit.

18. SCHEME TO COVER LOANS FOR GENERAL PURPOSE UNDER

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GENERAL CREDIT CARD (GCC)

It has been observed by RBI that credit cards are now being extensively issued in urban and semi urban areas and used by individuals to make purchases of goods and services on credit as well as make cash withdrawals. However, in rural areas, with limited Point of- Sale (POS) and limited ATM facilities, while similar product may not be feasible, there has been demand for General Credit Card (GCC), which is akin to Kisan Credit Card (KCC). Accordingly, as per the instructions of RBI a new scheme, General Credit card, has been introduced by the Bank so as to be operable in our Semi- Urban & Rural branches. The Scheme shall cover general credit needs of our constituents in rural and semiurban branches. 2. Objective : The objective of the scheme is to provide hassle-free credit to our customers based on the assessment of cash flow without insistence on security, purpose or end-use of the credit. 3. Eligibility : All our existing customers either with more than 3 years of banking history with the branch/ having sizeable deposit or with loan accounts which are classified as standard assets in our books will be eligible for availing loan under the scheme. 4. Nature of facility : The credit facility extended under the Scheme will be in the nature of revolving credit i.e., Cash Credit. The GCC-holder will be entitled to draw cash from the specified branch up to the limit sanctioned. No plastic / electronic card will be issued under the scheme, but in place of a card, a special passbook will be issued to the borrower. 5. Quantum of limit :

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Quantum of the limit will be based on the assessment of income and cash flow of the entire household. However, the total credit facility under GCC for an individual shall not 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. 6. Interest rate : On par with Agri Short Term Loans. Enhanced rate of interest at 2 % p.a. be charged to borrowers who default in repaying the loan. The cash flow of the rural dwellers varies from monthly intervals to quarterly / half yearly / yearly interval based on the activity undertaken by them. Hence interest shall be applied to the account at monthly / quarterly / half yearly / yearly intervals or on specified repayment dates coinciding with the cash flow of the applicant. 7. Security : No collateral security should be insisted upon. 8. Flexibility in use of credit : Our borrowers can avail the credit facilities provided under GCC, as per their requirement and eligibility, without any insistence on security and the purpose or endues of the credit. 9. Sourcing of borrowers : Bank shall use the services of our own staff in this regard instead of using the services of local post office, schools, primary health centers, local govt. functionaries etc., as mentioned in RBI letter in as much as the scheme is open to our own customers. 10. Renewal : Account will be reviewed every year and renewed after every 3 years. 11. 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 which may be at yearly/ half yearly / quarterly / monthly intervals based on the occupation of the

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applicant / his family. In case the entire amount is not repaid a minimum of 20 % of the amount due along with upto date interest debited should at least be repaid. 12.Classification - Priority sector lending status : 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. 13. Documentation: Application DP note (COS 228). DP note take delivery letter. Arrangement Letter 14. Inspection & Follow up: As per the extant instructions for Agriculture Cash Credit/Term Loans availed by the borrowers.

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19. SCHEME FOR FINANCING MICRO FINANCE INSTITUTIONS (MFIs) / NON GOVERNMENT ORGANISATIONS (NGOs)
Micro finance and SHG-Bank Linkage Programme have been recognized as successful engines of delivery of credit to the underserved in the developing countries. So far our thrust had been on direct lending to SHGs. Routing micro credit through NGOs / MFIs functioning as financial intermediaries when compared to direct financing to SHGs is more cost effective. With the ultimate aim of developing the Scheme to increase the outreach by financing large number of Self Help Groups through a cost effective model with lesser manpower requirements for the Bank, a scheme for financing of MFIs / NGOs has been developed and has been approved by the competent authority. Salient features of the scheme are : Objective To enable the Bank to lend to MFIs/NGOs for on lending to SHGs /JLGs/ Individuals. To enable the Bank to increase the outreach by financing large number of SHGs/JLGs in a cost effective manner and supplement the efforts of the branches in financing SHGs/JLGs. Eligibility a) The NGO / MFI, to be eligible for financing under the scheme, will have to be of any one of the following: (i) Societies registered under Societies Registration Act, 1860 or similar State Act. (ii) Trusts registered under Public Trust Act, 1920 or similar Act. (iii) Companies registered under Companies Act, 1956 including Section 25 companies. (iv) Specialist and other Co-operatives such as Mutually Aided Co-operative Societies and SHG Federations/Clusters registered under Mutually Aided

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Cooperative Societies, Act in Andhra Pradesh and other relevant legislations in the respective states. (v) Any other type of institution that offers micro finance and related services may be considered on merits. vi) NBFCs engaged in Micro Finance activity which are registered with RBI. b) The NGO / MFI falling in the above mentioned list of entities should have partnership with: i) A minimum of 50 SHGs/JLGs in case of an NGO/MFI on-lending to SHGs/JLGs ii) A minimum of 500 individuals in case of an NGO/MFI on-lending to Individuals. iii) SHG Federations/Clusters should have a minimum membership of 30 SHGs. Track record (i) The NGO / MFI must have been in existence for at least 12 months and shall have a track record of running a successful micro credit programme at least for the last 6 months. (ii) The NGO / MFI should be continuously profit making, where the MFIs are in existence for 2 years or more. In case of existence of less than 2 years, the Sanctioning Authority will ensure that the projected profit of the NGO / MFI should be sufficient to meet the repayment obligation of the loan. (iii) The NGO / MFI should not be a defaulter to any Bank / FI. (iv) Portfolio at risk of the NGO / MFI should be less than 5%. (Ratio of the amount overdue for 60 days or more to the total loans on a given date) (v) It maintains a satisfactory and transparent accounting system, MIS and internal audit system. (vi) NGO / MFI must exhibit transparency in dealing with its borrowers like levying of service and other charges, etc.

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(vii) NGO / MFI should not borrow from other sources for the same project for which loan from our Bank is being availed. (viii) Its activities should be secular in nature. (ix) In case of takeover of NGO / MFI loan from other banks, all the terms and conditions for taking over of the loan will need to be complied with. Guidelines for assessment of NGO/MFI (a) Rating of the NGO / MFI (i) Loan below Rs.200 lacs: Internal scoring as per scoring model (as per annexure-B to the circular) is to be carried out. To become eligible for finance, NGO / MFI will have to obtain a minimum of 60 marks out of overall 100 and minimum marks obtained in respect of vital parameters viz., Credit & Financial Management, Manpower, Book-keeping / Accounts, Monitoring Arrangement & Financial Parameters stated in the scoring model should not be less than 30. (ii) For loan of Rs.200 lacs and above up to Rs. 500 lacs: a) Scoring as per internal scoring model: The internal rating as per the Banks scoring model should also be carried out in case of loans above Rs.200 lacs, apart from rating by the external rating agency. b) Rating from external rating agency: The NGO / MFI should have a valid credit rating from any of the Micro Credit rating agencies, MCRIL, CRISIL, CARE, ICRA and Planet Finance. Minimum eligibility criteria for financing should be that the NGO / MFI must get a rating within the top four ratings of the Micro Credit rating agencies, viz., MCRIL, CRISIL, CARE, ICRA and Planet Finance. iii) For Loan above Rs. 500 lacs: a) Scoring as per internal scoring model: The internal rating as per the Banks scoring model should also be carried out in case of loans above Rs.500 lacs, apart from rating by the external rating agency.

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b) Rating from RBI approved agencies, viz., CRISIL, CARE, ICRA and Fitch India under the RBI guidelines for implementation of New Capital Adequacy Framework (NCAF). The above stipulation has been kept due to the RBI guidelines on New Capital Adequacy Framework (NCAF) which prescribe external rating by the approved agencies (CRISIL, CARE, ICRA and Fitch India) for borrowers with exposures in excess of Rs.5.00 crore. In terms of the NCAF, for borrowers rated AAA, AA and A of CRISIL (or equivalent long-term rating grades of other agencies), risk weights for the exposures become 20%, 30% and 50% respectively, which leads to substantial relief on capital allocation to the Bank for such exposures. This implies that under NCAF, no such relief on capital charge will be available to the Bank in respect of exposures in excess of Rs.5.00 crore to MFIs/NGOs which have been externally rated by rating agencies other than, CRISIL, CARE, ICRA and Fitch India. (b) TOL/TNW: Maximum permissible TOL/TNW to be 5. Circle CGMs are authorized to relax TOL/TNW to 8 in special cases where NGOs/MFIs have excellent performance record. (c) Relaxation in Ratings below prescribed grading - Administrative clearance/Prior Approvals:

In the case of proposals of NGOs/MFIs which otherwise have good track record but are rated below minimum prescribed rating of up to top four, i.e. up to (6th) in case of rating by MCRIL and up to mfR5 (5th) in case of rating by CRISIL are to be considered for financing, prior administrative approval from Circle CGM will have to be obtained. Even if rating given by the external credit rating agency being within the acceptable level and minimum marks obtained in respect of vital parameters viz., Credit & Financial Management, Manpower, Bookkeeping / Accounts,

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Monitoring Arrangement & Financial Parameters stated in the scoring model are not less than 30, (i) if the overall score as per the internal scoring model is less than 10% of the hurdle score of 60 out of 100, i.e., up to 54, administrative approval should be obtained from the Circle CGM before sanctioning the loan proposal. (ii) if the overall score as per the internal scoring model is 53 or less, prior administrative approval should be obtained from the DMD & GE (RB) before sanctioning the loan. (d) The internal scoring should also be done in case of renewal of the limits. (e) For renewals, fresh rating from rating agency need not be insisted upon. In case of enhancements, the sanctioning authority may, if need be, ask for a fresh rating to be done. (f) NABARD has made arrangements with CRISIL, ICRA, CARE, M-CRIL and Planet Finance for rating of NGO / MFI and NABARD will reimburse the Bank the cost of rating of NGO / MFIs to the extent of 100% of the Professional Fee subject to a maximum of Rs.1,00,000 charged by the rating agency. The remaining cost would be borne by the concerned MFIs. Nature of facility : Medium Term Loan / Cash Credit Margin : NIL Frequency and Quantum of loan (i) Need-based repeat finance. (ii) Requirement of finance to be worked out based on the health of the NGO / MFI and the business plan as per the appraisal format Rate of interest (a) To be charged by Bank: The rate of interest will be at SBAR. (b) To be charged by NGOs/MFIs: While the NGOs/ MFIs will have the freedom to decide on the spread, such spread will form part of the loan agreement executed by the NGOs / MFIs to ensure that such freedom is not an unbridled one to charge usurious rate of interest to the SHGs/JLGs.

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(c) In addition to this if the NGO/MFI intends to recover any other charges in any form like Service charges etc from its borrowers while on lending, the same will also form part of the Agreement. Repayment period (i) In case of Term Loan: monthly / quarterly / half-yearly. Installments may be set depending on the project/ purpose. However, total repayment period should not exceed 3 years. (ii) Cash credit will be renewed annually. Security a. Primary Hypothecation of Book Debts of the NGOs / MFIs/MF-NBFCs. b. Collateral i) For Non- NBFCs- Nil. However, personal guarantee of the Promoters / Directors and charge over other available assets to be explored. If available assets are not taken as collateral, reasons for same should be spelt out in the proposal. ii) For NBFCs - The collateral security to be obtained from MF-NBFCs under the scheme shall be: Hypothecation of other free assets owned by the company and second charge on assets charged as considered necessary may also be stipulated. Application : As per annexure-A to the circular. Documents a. Loan application along with enclosures. b. Arrangement letter. c. Articles of Agreement for financing SHGs through NGOs / MFIs (MF-1). d. Deed of Guarantee (If Guarantee is being obtained) (MF-2). Sanctioning Authority & Financial powers for sanction of loans AGMs of the Region / Branch or AGM of the CPC and above, as per the financial powers for sanction of advances vide Delegation of financial powers. Submission of statement of receivables / certified statement of receivables from Charted Accountant

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a) Monthly statement of receivables to be submitted by the NGO/ MFI before 15th of the following month to the Bank, failing which a penal rate of 25 bps to be levied for the month. b) Quarterly Statement of Dues from SHGs/JLGs financed by NGO/MFI duly certified by a Chartered Accountant to be submitted by NGO/MFI. Monitoring mechanism Suitable monitoring mechanism to be put in place to ensure end-use of funds through: (a) Scrutiny of statements of loans disbursed, recoveries and outstanding position. In case of multiple borrowings from various Banks/FIs, copies of the last statements submitted to other Banks/FIs from whom (b) Bank officials should have meaningful dialogue / interactions with the board members to ascertain the proper functioning of the NGO/MFI. (c) Inspection of SHGs financed by the MFI on random sample basis with particular reference to compliance on the maximum rate of interest being charged for on lending as declared by the NGO / MFI in the Agreement with the Bank. (For application, scoring model, appraisal format, documents etc. please refer the master circular No.e-Cir No. : 765/2008 09 : Circular No. : RABG/RBNFMCFI-MICROFI/6/2008 09 dated 24.03.2009) It has been decided by the appropriate authority to permit the relaxations in the scheme 1.Track record ; profitability parameter 2. calculation of TOL/TNW

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20. SHG CREDIT CARD AND SHG GOLD CARD

Objective: a. To provide hassle-free loan to SHGs for internal lending for consumption as well as economic activity. b. To enable SHGs and its members to take up micro enterprises/economic activity. Eligibility Criteria: All matured SHGs who have i. developed proper group dynamics viz., conduct of meetings, feeling of belongingness, regularity of internal lendings, bookkeeping, transparency and democracy in election of office bearers, etc., ii. reached third level of credit linkage and enjoying a credit limit of Rs.50,000/iii. repayment in the earlier accounts must be regular, and iv. at least 2 of the group members should be literates to operate the account. Preference to be given to the groups pursuing economic activities. Credit limit: Maximum credit limit permissible to SHG will be : i. 4 times the corpus of the SHG, which include its savings, interest earned on internal lending and revolving fund, if any. ii. Proposal for economic activity requiring higher quantum of finance, may be considered based on the viability of the proposal. Margin: Group corpus is treated as margin and no separate margin will be insisted as in the case of all SHG loans.

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Security: Hypothecation of the assets created out of the Bank loan. Documentation: As applicable to SHGs and in addition a request in the application form for issue of card. Validity: The SHG Credit Card / Gold Card will be valid for 3 years subject to satisfactory operation of the account and annual review by the Sanctioning authority. Insurance: The assets created out of Banks loan will be insured as per existing instructions of the Bank. Issue of card: a. The cards will be named as SBI SHG Credit Card and SBI SHG Gold Card. b. The cards will contain the details of the group, their account, authorized signatories, names of the group members, etc. The cards will be issued along with pass books free of cost. In case of any change in the group, a new card will be issued incorporating the changes. Discretionary powers: As applicable for SHG loans. Other distinguishing features of SHG Credit Card and SHG Gold Card SHG CREDIT CARD: i. Credit Limit : Minimum Rs.50,000/ii. Nature of Credit facility: The credit facility is in the nature of cash credit. iii. The SHG can draw the eligible limit and credit the surplus as per their requirement within the drawing powers. iv. At the end of every year from the date of issuing of card, the limit should be reviewed and on such review branch may continue/enhance/reduce the limit depending upon satisfactory conduct of the account and the corpus available.

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v. When the facility is discontinued, the loan amount will be crystallized and usual steps will be taken for recovery. vi. No cheque book will be issued. Drawals to be effected by withdrawal slips. Any number of drawals and credits within the limit are permissible. vii. Rate of Interest: As applicable to SHG loans. SHG GOLD CARD: SHG Gold Card will be issued only for starting/carrying on economic/income generating activities. i. Credit Limit: Minimum Rs.2,00,000/ii. Nature of Credit facility: Will be sanctioned as a Term Loan facility with repayment schedules as per economic activity financed. iii. Rate of Interest: As applicable to SHG loans. Consumption credit component should be available in both cards.

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21. SCHEME FOR FINANCING PRIVATE COLD STORAGE/ PRIVATE WARE HOUSES FOR ONLENDING TO FARMERS
Scheme for financing private warehouses/ cold storages was introduced in Ahmedabad Circle in August 04 & later on extended to Bhopal Circle in November 2004. The scheme is doing well in both the Circles and presents a good business opportunity in Agri. segment with lesser administrative costs & manpower. In view of the inherent advantages of this scheme, it has been decided to extend it to all the Circles in the Bank. Most of the Farmers in our country depend heavily on borrowed money for their agricultural operations. The borrowings are made at an unreasonably high rate of interest, mostly from the moneylenders. As a result, they are forced to sell their produce immediately after the harvest, often at unremunerative prices, thus loosing heavily on their investments. This vicious cycle recurs year after year, aggravating the plight of the poor farmers. The creation of storage facilities, through construction of grain godowns and cold storages in villages, will bring much needed relief to the farmers. The farmers can store their produce in godowns by paying rents, and release the produce in the market when the price is reasonable. Meanwhile, farmers can borrow from a financial institution, in case of need, by pledging warehouse receipts. This will result in modernisation of the rural infrastructure, development of the banking habit among farmers and generation of more income from their farming operations. Need for the scheme: As per recent RBI directives, financing such cold storages/ storage facilities irrespective of their location can be treated as priority sector advance subject to the condition that the unit is used for storing mainly agricultural produce. If the cold storage is registered as SSI unit, the loans granted to such units may be classified

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under advances to SSI subject to their fulfilling the eligibility norms. In view of this relaxation, potential for increasing indirect agricultural advances has gone up tremendously. SCHEME DETAILS: 1. Purpose: For financing private cold storages/warehouses for onlending to farmers against agricultural commodities stored in the cold storage/warehouse. 2. Eligibility: All private cold storages/warehouses subject to the following conditions: i. The promoters of the cold storage/warehouse are persons of good repute and integrity ii. The capacity of the cold storage should be more than 5000 MT iii. The cold storage/warehouse should be in good running condition and should have registered post-tax profits for the last 3 years. iv. Conduct of the accounts of the cold storage/warehouse with our bank/other banks should be satisfactory and all their existing accounts classified as standard asset v. New cold storages can also be considered for finance under the scheme subject to the controlling authority being satisfied about the promoters integrity and the projects viability. vi. Units rated SB3 and above as per Agri- CRA. 3. Assessment of credit limit : Loans will be sanctioned to the cold storages/warehouses taking into account their capacity to store the produce, nature and value of produce normally stored and average level and value of storage. The loan limit fixed 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. The sanction of limit is subject to the cold storage/warehouse submitting an undertaking to the Bank covering the following points:

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a. the Bank finance will be utilised for on-lending to farmers b. the interest charged to the farmer will not be more than 1.50% of what is levied by the Bank to the cold storage/warehouse c. the cold storage/warehouse owner will keep complete record of the produce stored, details of farmers to whom on-lending was done (details like name, address), quantity and nature of produce stored farmer-wise, location of bags in the cold storage/warehouse and obtain an undertaking from farmers that he is the rightful ownerof the produce/commodity and the same is unencumbered. d. owner of the cold storage/warehouse will permit the bank officials or agents appointed by the Bank to inspect the produce/goods stored and verify the books/records maintained by them e. owner of the cold storage/warehouse will deposit with the Bank the amount lent by the Bank against the relative WHR before release of the goods/produce covered by it to the farmers. 4. Ceiling on loan amount: Minimum: Rs.25.00 lacs ; Maximum: Rs.1.00 crore However, Circle Management can selectively exceed this limit in deserving cases if they are satisfied about the integrity of the borrower and viability of the project. 5. Disbursal: The disbursal of the loan amount will be restricted to 60% of the value of produce /commodities stored and belonging to farmers to whom on lending has been done by the cold storage/warehouse. For this purpose, a detailed statement should be submitted by the cold storage/warehouse enclosing photo copies of the WHRs against which on lending has been done by it. Value of other commodities/produce stored where on-lending has not been done and the value of WHR which is more than 6 months is to be excluded for arriving at the eligible loan limit. Drawings from the account will be by way of cheques issued to the farmers (as on lending) can only be permitted.

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The name of the farmer and amount should be cross-verified from the list produced to the Bank by the cold storage/warehouse. Type of Facility : Clean Cash Credit. 6. Security: a. Primary : NIL b. Collateral: (i)Equitable mortgage of the warehouse/cold storage is compulsory and the value of the collateral coverage (inclusive existing and proposed loan) should be 100%. This is important. (ii) Personal guarantee of the proprietor/partners/directors of the cold storage/warehouse. 7. 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. 8. Documents: The following documents Form C-9, Form C-10 and AB2 amended and duly approved for the scheme by the Corporate Center Law Department have to be obtained a. Application form for financing cold storage / ware house for on lending to farmers. b. Arrangement letter. c. AB2 (Amended) Deed of personal guarantee / third party guarantee d. Form C.9 (Amended) Memorandum of deposit for creation of charge for cash credit limit e. Form C.10 (Amended) - Memorandum of deposit for creation of further charge for cash credit limit where initial charge is created by way of mortgage by deposit of title deeds. f. Suggested - Appraisal cum sanction letter for the scheme for financing cold store /ware house for on lending to farmers.

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9. Renewal: The limit is valid for 12 months and needs to be renewed every year. Renewal of the limit is subject to satisfactory conduct of the facility . 10. Repayment : The cash credit account should be brought into credit balance by the end of November each year and will continue with the credit balance till the commencement of the next season. 11. Inspection: Pre-sanction inspection is a must. Post-sanction inspection should be conducted at monthly intervals by the branch officials. Quantum of commodities/produce stored and which are covered under the facility should be cross-checked with the books of the warehouse/cold storage. Details of amount on-lent by the warehouse/cold storage should also be verified and it should be ensured that the amount drawn from the Bank has been utilised for on lending only. 12. Insurance: The Ware House / Cold Storage structure as well as the commodities/produce stored should be insured by the owners of cold storage/warehouse for its full value and a copy of the insurance policy should be kept on record by the Bank. 13. Sanctioning authority: These advances are to be treated as clean. Therefore, the sanctioning powers have to be exercised as per the powers delegated to the authority for sanction of clean advances i.e. these loans can be sanctioned only by CCC II or CCC I as the case may be. 14. Other conditions: The specimen signature of the authorised signatory of the warehouse receipt must be on record at the branch where the loan is made available. The cold storages should have sufficient power supply arrangement including a standby electric supply arrangement/DG set.

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 The warehouse/cold storage should be in conformity with the norms prescribed by NABARD. Cold storages should have different chambers for storing various commodities and have provision for seed treatment to guard against sprouting and to enhance storage period. The cold storage/warehouse should have a proper licence and fitness certificate issued by the appropriate Govt. authority. In the case of cold storages/warehouses owned by companies, the formalities connected with advances sanctioned to companies should be adhered to (like registration of charges with ROC, obtention of resolutions, affixing of common seal on documents, search report etc.) The cold storage/warehouse should affix a stamp, on the following lines, on the face of the warehouse receipts issued by them, where on lending is resorted to: Issued against credit limit granted to us by SBI. As the holder of WHR is raising a loan against the value of commodity/produce/stock covering this receipt, this instrument is not eligible for being pledged as security for a loan to any lender, Bank, financial institution or a money lender by its holder or any endorsee. 15. Segmentation : The loans sanctioned under the scheme are to be classified as Indirect Agricultural Advances under priority sector.

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22. SCHEME FOR FINANCING SEED PROCESSORS

Seed is one of the key farm inputs, which play a vital role in increasing productivity of crops. There is a good demand for good quality certified seeds from the farmers. National Seeds Corporation & State Seeds Corporations and a number of private seed producers and processors are engaged in this activity. Many seed processors support the seed growers both in kind & cash to meet the cultivation expenses of the crops during the cropping season & also farm level post harvest expenses after the harvest of the crops. The seed produce is then bought by them at mutually determined price for processing in their units. This processed seed is then sold in different parts of the country to the farmers. The value of kind and cash assistance given to the seed growers is first recovered from the sale proceeds and then the balance is paid to the seed grower. Many such units have come up through out the country which procure foundation / certified seeds of Paddy, Wheat, Mustard & Peas etc. from Agricultural Universities / National Horticulture research centers and are given for multiplication at farmers fields. Therefore, a scheme for financing the receivables of seed processors has been approved by the bank. 1. OBJECTIVES: To extend financial assistance to the seed processors against their receivables due to them from the seed growers. 2. ELIGIBILITY: Seed processors / units Enjoying good reputation & credit worthiness Holding a valid license from the concerned State Department of Industries for installation of Seed Processing Plant. Having valid certificate from Seed Certification Department.

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 Doing business for the last 3 years Having receivables from the farmers Who have posted profits during the past two years of operation are eligible to avail credit limits under the scheme. 3. FACILITY: Agriculture Cash Credit (Hypothecation of receivables not older than 6 months). 4. LOAN AMOUNT: Need based ACC limit without upper ceiling but above Rs.2.00 lacs. 5. RATE OF INTEREST: As applicable to agricultural advances. 6. MARGIN : 40 % of the value of the receivables. 7. SECURITY: Primary: Assignment/hypothecation of receivables from the farmers. Collateral: Equitable mortgage of residential/ commercial property worth 1.5 times the limit sanctioned, belonging to either the applicant or the guarantor. Regd. Mortgage of agri. land of the borrower/guarantor can also be obtained to collaterally secure the advance, in case value of the residential/commercial property is not adequate to cover the advance. 8. APPLICATION & ASSESSMENT: As applicable to trade advances. Valid license holder seed processors maintaining proper record of receivables due from the farmer seed growers shall be financed under the scheme. A simple certification / debts of receivables not older than 6 months should be obtained from the seed processor. Detailed statement of outstanding / debts will not be necessary. The certified amount should be duly verified & authenticated by the branch from the books maintained by the seed processor. Then a maximum of 60% of aggregate value of receivables should be fixed as the credit limit.

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9. DOCUMENTATION: (As in SIB) i. Hypothecation Agreement AB 1. ii. Guarantee agreement Form 'E'. iii. D. P. Note and DPN take delivery letter. iv. Letter of Arrangement. 10. OTHER TERMS & CONDITIONS: i) Loan to be liquidated within a maximum period of 6 months for each crop season i.e., Rabi & kharif. ii) If the applicant is borrower of other Bank, he should close the account with that bank or his account has to be taken over by our financing branch before disbursement of loan. iii) Statement of eligible receivables should be obtained at half yearly intervals. The statement should be verified from the borrowers books of accounts or audited financial statements. 11. ADVANTAGES OF THE SCHEME: (i) These are high value advances with lower transaction & supervision costs. (ii) There is a huge potential, which until now remains untapped. (iii) Recovery percentage in such advances (seed industry) is generally high. (iv) The seed processors customer base can be utilized for selling/cross selling our other products. 12 . In states where the ad-valorem stamp duty for creation of collateral security is high the matter may please be taken up with at the appropriate forum or with authority for waiver of stamp duty as a special case.

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23. FINANCING OF JOINT LIABILITY GROUPS OF TENANT FARMERS

Rationale : Microfinance has been recognized as an effective medium for financial inclusion and SHG-Bank Linkage model of microfinance has been accepted not only as a successful vehicle for delivery of credit to the poor but also as a viable business proposition for the banks. Joint Liability Groups (JLGs) is another model for providing credit to those who remained uncovered by formal financial institutions. The need for providing hassle-free credit to the tenant farmers through SHGs or Joint Liability Groups (JLGs), has been examined at the highest levels of the government. A group approach can be successfully adopted by banks to reach tenant farmers, share croppers, oral lessees and farmers with small land holdings without proper revenue records. Financing to these categories was hitherto hindered by absence of collaterals. The mechanism of JLG would enable us to extend credit on the basis of mutual guarantee provided by the members of JLG. It would also reduce transaction costs of both bank and borrowers and help in loan recovery. 1. Definition

Tenant: Any person who holds land under another person's name and pays rent to such other person on account of the use of land is called a tenant, i.e., Tenant is a person who has taken the lease and is liable to pay rent for the piece of land. Oral lessees: The term refers to tenancy without legal sanction and permission or without any written agreement.

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Sharecroppers: Tenants who pay rent to landlords by way of sharing crops grown (in lieu of rent by cash) may be called sharecroppers.

2. 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. To extend collateral free loans to target clients through JLG mechanism. To build mutual trust and confidence between bank and tenant farmers. 3. General features of JLG

A Joint Liability Group (JLG) is an informal group comprising preferably of 4 to 10 individuals coming together for the purposes of availing bank loan either singly or through the group mechanism against mutual guarantee.

The JLG members would offer a joint undertaking to the bank that enables them to avail loans. The JLG members are expected to engage in similar type of economic activities like crop production.

The management of the JLG is to be kept simple with little or no financial administration within the group. 4. Criteria for selection of JLG members JLGs can be formed primarily consisting of tenant farmers and small farmers cultivating land without possessing proper title of their land. Members should be of similar socio economic status and background carrying out farming activities and who agree to function as a joint liability group. The groups must be organised by the likeminded farmers and not imposed by the bank or others. The members should be residing in the same village / area and should know and trust each other well enough to take up joint liability for group/ individual loans.

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 The members should be engaged in agricultural activity for a continuous period of not less than 1 year within the area of operations of the bank branch. The group members should not be a defaulter to any other formal financial institution. JLG should not be formed with members of the same family and more than one person from the same family should not be included in the JLG. There is a need for a very active member of the group to ensure leadership role and ensure the activities of the JLG. The selection of a good / able / active leader for the JLG is an essential need which will ultimately benefit all the JLG members. However, care should be taken to ensure that benami loans are not cornered by the group leader. 5. Size of the JLG The group should be formed preferably with 4 to 10 members to enable the group members to offer mutual guarantee. While informal group of upto 20 members could also be considered, such large groups are found to be not effective in fulfilling mutual guarantee obligations in the case of farmers. Therefore, smaller groups of farmers (4-10 members) are recommended for effective functioning of JLG. 6. Formation of JLGs In the initial stage, JLGs can be formed by using our own staff, wherever feasible. Bank may also engage business facilitators like NGOs and other individual rural volunteers to assist in promoting the concept and formation of groups. Scheme for incentivising NGOs and the Scheme for enlisting Individual Rural Volunteers may be leveraged for the purpose. On formation of JLGs, the bank officials need to discuss with the JLG members the banks regulations, lending procedures, services etc. The principles of self help and group strength need to be emphasized. Group cohesion has to be ensured. Adequate emphasis should be placed on the roles,

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expectations and functions of the group / members & the benefits of group dynamics. State Government Departments like Agriculture Department also could form JLGs of tenant farmers and small farmers not having clear land title. The JLGs of such eligible farmers can also serve as a conduit for technology transfer, facilitating common access to market information; for training and technology dissemination in activities like soil testing, health camps and assessing input requirements. 7. Savings by JLG The JLG is intended primarily to be a credit group. Therefore, savings by the JLG members is voluntary. All the JLG members may be encouraged to open an individual "no frills" account under SBI Tiny. However, if the JLG chooses to undertake savings as well as credit operations through the group mechanism, such groups should open a savings account in the name of JLG with at least two members being authorised to operate the account on behalf of the group. 8. JLG Models : Bank can finance JLG by adopting any of the two models. Model A Financing Individuals in the Group: The JLG would normally consist of 4 to 10 individuals. The group would be eligible for accessing separate individual loans. All members would jointly execute one inter-se document (making each one jointly and severally liable for repayment of all loans taken by all individuals in the group). Bank will assess the credit requirement, depending on the crops to be cultivated, available cultivable land and credit absorption capacity of the individual. However, there has to be mutual agreement and consensus among all members about the amount of individual debt liability that will be created. Model B - Financing the Group: The JLG would consist preferably of 4 to 10 individuals and function as one borrowing unit. The group would be eligible for accessing one loan, which could be combined credit requirement of all its members. The credit assessment of the group could be based on the available

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cultivable area by each member of the JLG. All members would jointly execute the document and own the debt liability jointly and severally. JLG is mainly a credit product. But if the members want to save through the group, Bank can open saving account in the name of the JLG to be operated by two members of the group as decided through a resolution by the JLG. 9. Critical factors in JLG approach The concept depends heavily on mutual trust within the groups and on peer pressure for the repayment of loans. The quality of group leadership is critically important for the sustainability of the group. The JLG exists only for the single purpose of expediting certain categories of loans. Generally they are not multifunctional groups. 10. Credit Assessment Model A: Financing Individuals in the Group The JLG would prepare a credit plan for its individual members and an aggregate of that is submitted to the branch. The individual members of JLG would be eligible for the loan after the branch verifies the individual members credentials. Model B: Financing the Group JLGs that undertake savings apart from credit are required to maintain books of accounts. They may also be graded by banks on the basis of performance parameters. However, the quantum of credit need not be linked to groups' savings as in the case of SHGs. The credit requirements for the group may be worked out based on combined credit plan needs of individual members. 11. Purposes of credit The finance to JLG is expected to be a flexible credit product addressing the credit requirements of its members including crop production, consumption, marketing and other productive purposes. 12. Type of loan Branch may sanction ACC, ATL or KCC depending upon the purpose of loan.

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13. Loan limit Considering that the loan to be granted is against the mutual guarantee offered by the group, maximum amount of loan may be restricted to Rs.50,000 per individual both under Models A & B. 14. Rate of interest : As applicable to SHGs. 15. Margin and Security Norms No collaterals may be insisted upon against the loans to JLGs. It may, however, be ensured that the mutual guarantees offered by the JLG members are kept on record. Margin as per the usual norms may be applied. 16. Documents Model A: Financing Individuals in the Group The documents to be obtained include Introduction form (JLG-1) Application-cumappraisal form (JLG-2) Letter of undertaking (JLG-3) Mutual guarantee (JLG-4) D.P. Note and D.P. Note Delivery letter Model B:Financing the Group Documents as applicable to SHGs may be adopted. 17. Credit to JLGs to form normal business activity under microfinance and Priority Sector : As the scheme is intended to benefit farmers cultivating lands who may not have adequate collateral to offer to avail of bank loan in their individual capacity, lending under this scheme may be treated as part of microfinance and direct agricultural advances under priority sector advances segment. 18. Crop insurance scheme National Agricultural Insurance Scheme (NAIS), i.e., Rashtriya Krishi Bima Yojana of Agriculture Insurance Company of India extends crop insurance cover

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to all farmers including tenant farmers, sharecroppers growing notified crops in the country.

24. SBI KRISHAK UTHAAN YOJNA

(Ref: e-Circular Sl. No.: 205/200809::Cir No.:NBG/ABU/PDM-KUY/9/200809 dated 11.07.2008) Objective: To provide easy access to short term production and consumption credit to meet genuine requirements of tenant farmers, share croppers and oral lessees who do not have recorded land records and where there is no written undertaking/ document available to substantiate raising of crops by the tenant farmer/ share cropper/oral lessee. It will help increase their income from agriculture production activities. Eligibility: Landless labourers, share croppers, tenant farmers, oral lessees, (also covering oral tenants & small farmers) having no recorded land records are eligible if the sanctioning authority is sanguine of the applicant carrying on the activity, subject to production of an Affidavit for cultivation of crops. Should have a permanent residential address proof & have been residing at the place for at least past 2 years. Migratory tillers are not eligible under the scheme. Identification: The applicant must be from the area of operation of the branch and his/her identity should be verified through one or more of the following sources: i) Documents related to house of the applicant, ii) Voters list/Identity card Or iii) any other local document prescribed by the LHO concerned. Purpose:

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(i) To provide credit for purchase of improved seeds, manures and fertilizers, plant protection materials, payment of hire charges for tractors, irrigation charges, electricity charges etc, as per the cost of cultivation (ii) For meeting part of consumption needs and (iii) An additional support loan to tide over the adverse market conditions, if any, which normally prevail during the harvest season can also be considered. Limit: Upto Rs 50,000/- (maximum) Limit will be calculated on the basis of: i) Land area cultivated on tenancy or for sharecropping or on oral lease and Scale of Finance applicable to the crops cultivated inclusive of amount required for consumption needs, which should be capped at 20% of the production limit. ii) Another 20% of the production limit would be added for purpose of immediate needs of the borrower after harvest of the crop by the borrower. After harvest time is crucial for the farmers as it is the time when they have not sold their produce & need money to prepare for the next sowing or for self consumption which forces them to sell the produce at distress prices which prevail during the harvest season. This will help the farmer to avoid distress sale of their produce. Margin: Nil Application & Terms and Conditions: As applicable to KCC/ACC accounts Documents: i) DP Note (COS229) ii) DP Note take delivery letter iii) Arrangement letter iv) Affidavit (as per annexure) [Affidavit : Specimen of Affidavit drafted by the law Dept. Corporate Centre is enclosed as annexure. This should be stamped as per stamp duty applicable in the State and should be attested either before Oath Commissioner or before a Notary

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Public. The specimen may be suitably modified considering the requirements of the State, in consultations with LHOs Law Dept., if need be.] Security: Clean Loan Interest: As applicable to agriculture Cash Credit loan Type of facility: Revolving cash credit Annual Review and renewal once in 3 years. Disbursement: 20% of loan amount on sanction. Remaining 80% amount will be disbursed in phases only after satisfying that already released amount has been used for the purpose for which it was disbursed. This can be done, by gathering information from the borrowers of the same village. Repayment: The sale proceeds should be routed through the cash credit account. Market linkages, wherever possible, should be ensured. Sanctioning Authority: As per extant delegation of powers under agri segment for crop loans / KCC loans. Operation in the account: i) Total limit will be calculated as mentioned above & documents will be obtained for overall limit. Disbursements will be made in phases as per the requirements of the borrower for raising crops. ii) Withdrawal from the account will be through withdrawal slip as used for KCC. iii) At the time of withdrawal and deposit, the beneficiary should present the passbook for recording the transaction. iv) Though drawls in the account are expected as per seasonality of the crops/sub limits, yet, some flexibility may be allowed to enable the farmer to purchase inputs at convenient times when availability/prices are favourable. v) Submission of invoices/quotations should not be insisted upon, as borrowers use limit/sub-limits on the basis of scale of finance. Supervision and follow-up etc.: As applicable to KCC facility. Accident Insurance: The account will be covered under Personal accident insurance scheme (PAIS) as applicable to Kisan Credit Card. Application of prudential norms:

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The prudential norms as applicable to crop loans would apply to these accounts also.

Annexure

AFFIDAVIT
(TO BE SUBMITTED BY THE BORROWER UNDER SBI KRISHAK UTHAAN YOJNA) I, . (name of the borrower), son of ., Aged around. Years, presently residing at .. ., do hereby solemnly affirm and sincerely state on Oath as follows : i) I propose to avail crop loan under `SBI Krishak Uthaan Yojna Scheme against hypothecation of the crop for which the loan is to be sanctioned. ii) In this connection, I confirm and declare that I am a landless labourer / share cropper / tenant former / Oral Lessee (strike out whichever not applicable). iii) I hereby declare and confirm further that the properties mentioned in the Schedule to the Affidavit is the property which is the subject matter of lease (oral / written) in my favour for year to year or for a period of .. years as mentioned in the document and the lease is presently in force and Shri . is the lessor and the owner of the property ( a copy of the lease deed is enclosed). iv) I hereby confirm and declare further that I have not committed any default in paying the lease amount to the lessor and have not committed any breach of the terms and conditions of the lease. Moreover, I declare further that there are no arrears of any lease amount.

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v) I have also not resorted to outside borrowings against the security of the present crop which is the subject matter of the Bank finance. The crop to be raised is free from the charge / encumbrances. vi) I declare that the crop to be raised in the Scheduled agricultural land is and I am entitled for . extent of the crop by way of my share. vii) I undertake to protect the crop against all the possible damages by taking all reasonable steps expected from a owner of a property and I note to inform the Bank the time scheduled for harvesting (cutting of the crop) and the time of realisation of the yield. SCHEDULE OF THE PROPERTY Agricultural property (wet / dry) situated in Survey No. consisting an extent of. acres / guntas at . Village, .. Taluk/Mandal.. District, State, having the following boundaries: North : East : West : South :

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25. GRAMIN BHANDARAN YOJNA CAPITAL INVESTMENT SUBSIDY SCHEME FOR CONSTRUCTION / RENOVATION OF RURAL GODOWNS
Farmers generally do not have the economic strength and also scientific storage facilities to retain the produce with themselves. There is a felt need among farmers for scientific storage facilities to enable small farmers to enhance their holding capacity in order to sell their produce at remunerative prices at a later date and avoid distress sales. Accordingly, Grameen Bhandaran Yojana, a Capital Investment Subsidy Scheme for Construction / Renovation of Rural Godowns was introduced in 2001-2002 and extended upto 31.03.2007. The Scheme has now been approved for implementation during the years 200712, with modifications in its operational guidelines for new projects to be sanctioned after 26 /06 /2008. Accordingly, revised operational guidelines of the scheme are applicable for new projects sanctioned on or after 26.06.2008 to 31.03.2012. OBJECTIVES : To create scientific storage capacity in the rural areas to meet the requirements of farmers for storing farm produce. To promote grading, standardization and quality control of agricultural produce to improve marketability.

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 To prevent distress sale of produce by farmers immediately after harvest by promoting pledge financing and marketing credit. To introduce a national system of warehouse receipts in respect of agricultural commodities stored in such godowns. ELIGIBLE BORROWERS : 1. Individuals / Farmers. 2. Proprietary and partnership terms. 3. Co-operatives, Agro-processing co-operative societies. 5. Corporations, Agro-Industrial corporations. 6. Agricultural Produce Marketing Committees. 7. Group of Farmers/Growers. 9. Agro-Processing Corporations. 10. Self Help Groups. 11. Marketing Boards etc. LOCATION : The godown can be constructed / located in any area outside the limits of a Municipal Corporation area. Rural godowns located in Food Parks promoted by Ministry of Food Processing Industries are also eligible for subsidy. All Rural Godowns to be constructed under the Scheme in future should be confirming to the technical specifications relating to the implementation of the Negotiable Warehouse Receipt System (NWRS). The rural godowns of 1000 tones capacity and more shall be considered as eligible for assistance under the Scheme, only on giving an undertaking alongwith the application that they would be implementing the Negotiable Warehouse Receipt System. Directorate of Marketing & Inspection (DMI) in consultation with the Department of Food and Public Distribution and NABARD shall modify godown specifications to meet the requirements of implementation of Negotiable Warehouse Receipt System and NABARD shall ensure that these specifications are in-built in the eligibility criteria for giving subsidy to the rural godowns of any size under the Scheme.

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PROJECT COST : Assistance under the scheme will be available on capital cost of construction of godowns including allied facilities like boundary wall, internal road, platform, internal drainage, weighing, grading, packaging and quality certification. The ceilings relating to project cost calculation for subsidy computation are as under: Capital cost for Rural godowns up to 1000 tonnes capacity Capital cost for Rural godowns exceeding 1000 tonnes capacity Project cost as appraised by Bank or actual cost or Rs.2,500/- per tonne of storage capacity, whichever is lower. Project cost as appraised by Bank or actual cost or Rs.1,875/- per tonne of storage capacity, whichever is lower. However, for godowns exceeding 10,000 tonnes capacity, the subsidy would be restricted to that admissible for capacity of 10,000 tonnes only. The capacity of godown shall be calculated @ 0.4 M.T. per cu. mtr. SUBSIDY : Back ended subsidy provided by Department of Agriculture and Co-operation through NABARD as under based on the capital cost of the project and is linked to Bank/Institutional credit i.e. Projects financed by Banks / co-operatives etc. only are eligible for subsidy. Rate of Subsidy 33.33% Eligibility Projects in North-east, hilly areas, women farmer sand their SHGs / cooperatives and SC/ST entrepreneurs 25% and their SHGs/Cooperatives All categories of farmers (other than women farmers), agriculture graduates, Rs.46.87 lakhs Max Subsidy Ceiling Rs. 62.50 lakhs

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cooperatives and State and Central 15% warehousing corporations. Individuals, companies, corporations, etc. (e-circular No.453/2008-09 dated 31.10.2008) Normally subsidy is available only for godowns of capacity 100 tonnes (minimum) and a maximum capacity of 10,000 tonnes. RELEASE OF SUBSIDY : 50% of eligible subsidy is provided as Advance Subsidy by NABARD on submission of a project profile-cum-claim form immediately on sanction of loan by the Bank. The remaining 50% of the subsidy would be disbursed by NABARD on completion of the project as per scientific standards put forth and envisaged in the project and obtention of a satisfactory report by a Joint Inspection Committee comprising officials from the Bank, NABARD and the Directorate of Marketing and Inspection in the State. MARGIN : 25%. In NE states & hilly areas and SC/ST : 20%. DOCUMENTATION: As applicable to ATLs. SECURITY: Mortgage/charge of land and godown. REPAYMENT : 11 years with a grace period of one year. Repayment schedule worked out for Net Term Loan from Bank and subsidy is credited to loan account as the last / final instalment so as to liquidate loan fully. INTEREST : Pricing is done based on credit rating based on the revised CRA model. INSURANCE : Rs. 28.12 lakhs

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Insurance assets purchased / created out of Banks financial assistance is necessary to safeguard the interest of both the Bank and Borrower. Fixed assets and stocks under pledge / hypothecation to the Bank must be kept insured for full market value with an insurance company (Public or Private Sector) or at least to the extent of the Banks interest plus the stipulated margin. Property mortgaged to the Banks, as security should also be fully insured. Building, galas, fitting and fixtures and machinery (which form part and parcel of the immovable property) are required to be kept fully covered by insurance against risks of fire as well as lightning. Mortgaged properties should also be covered against riots, strikes, civil commotion, cyclone, earthquake and other calamities whenever such risks are apprehended and insurance cover against them is deemed necessary by the Bank. Insurance policy obtained in the joint names of the Borrower and Bank (except where indicated otherwise). Insurance premia is borne by the Borrower. UTILIZATION CERTIFICATE : After receipt of the full amount of eligible subsidy from NABARD and crediting in the SUBSIDY RESEVE FUND ACCOUNT Borrower wise a utilization certificate has to be submitted in triplicate to NABARD.

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26. FINANCING COLD STORAGE Capital Investment Subsidy Scheme for Construction / Expansion / Modernisation of Cold Storage and Storage for Horticulture Crops.
In order to minimize the post harvest losses and arrest wide scale price fluctuations in prices of horticultural produce, NABARD has introduced a capital investment subsidy scheme for construction of cold storage for storing of horticultural crops (Applicable upto 31.03.2007 and is subject to extension). Financing of cold storages may be undertaken by the branches as hitherto depending on the viability of the individual projects and on merits of each case. This Capital Investment Subsidy Scheme is being implemented only in those states / union territories / areas which do not administer or control rental of cold storages. This scheme has been now extended to Controlled Atmosphere (CA) storages also. The details of the Scheme are given here under. Objectives: To promote setting up of cold storage and reducing post harvest losses. To create cold chain infrastructure from farm to the consumer. To modernize / rehabilitate cold storages. Eligible Organisations: Individuals / Farmers, Group Farmers / Growers, Companies, NGOs, Partnership / Proprietary Firms, Corporations, Co-operative

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Agricultural Produce Marketing Committees, Marketing Boards / Committees and Agricultural Industries Corporations. Project Cost: Financial assistance should be made available on the capital cost of the cold storage only. The project cost will of course depend upon the capacity, technology used for the cold storage(s) and has to be arrived at on the basis of actuals / estimates of architects / invoice prices of machineries etc. In the case of Controlled Atmosphere (CA) Storages, as per the guidelines of National Horticulture Board (NHB), an estimated project cost of upto Rs16.00 cr may be considered. Margin: 25% of the Project Cost . The purchase value of land only (if purchased for the project) subject to a maximum of 10% of the project cost can be reckoned towards margin contribution of the borrower(s) / enterprise. Subsidy & Subsidy Administration: 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. The criteria of subsidy is linked to the cold storage capacity and capacity of cold storages is calculated on the basis of 3.4 cubic meters per tonne or 130 cubic feet per tonne. The calculation of subsidy would be as under. Category 25% New Cold Storage / Expansion Modernization of existing cold storage Other storages Onion etc Rs.1000/Rs.2000/Rs.250/Rs.500/Rs.4000/Rs.1000/Cost / MT. Admissible Subsidy @

However, in case of loans for Controlled Atmosphere (CA) Storages sanctioned by the bank on or after 28-07-2006, subsidy assistance to the extent of 25% of the

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capital cost of the project in general areas and 33.33% in the hilly and tribal areas, subject to an upper ceiling of Rs 4.00 cr per project, is allowed, without any upper limit on the capacity. That means, subsidy for Controlled Atmosphere storages is not restricted and related to storage space of upto 5000 MT capacity, as in the case of other Cold Storages. Subsidy is provided by National Horticulture Board (NHB), through NABARD as a back ended subsidy. Administration of subsidy and adjustment in the borrower accounts is done as in the case of financing Rural Godowns. However, in this case joint inspection is carried out by the monitoring committee consisting of officials from our Bank, NABARD and the In-Charge of the NHBs Centre in concerned State. At the time of sanction of loan itself it should be made known to the borrower(s) that sanction/release of subsidy would be subject to the availability of funds, instruction of GOI / NHB from time to time in this regard. National Horticulture Board (NHB) has decided that i) for loans upto Rs.20 lacs inspections will be conducted by the Officials from the Banks concerned ii) for loans of above Rs.20 lacs, joint inspection will be conducted as above. (e-Cir No.299/2008-09 dated 28.08.2008) Pattern of Assistance: 25 % promoters Contribution (Margin) 50 % Term Loan from Bank 25 % back-ended Capital Investment Subsidy by NHB. Disbursement of Term Loan would be upto 75% of the project cost ie. inclusive of eligible back ended subsidy and NO interest is charged on this portion of the loans (equal to the subsidy amount). No interest is payable on the subsidy received and parked in the Subsidy Reserves Fund Account. Security: As applicable to Agricultural Term Loans. Rate of Interest : As per rates applicable to ATLs.

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Documentation: As applicable to ATLs. Repayment : The loan has to be repaid within a maximum period of 9 years inclusive of a grace period of 2 years, installments are fixed depending on the cash flow. General 1. Emphasis shall be laid on: Reducing Post Harvest Management losses with Multi-chamber (at least two chambers) and Multi Product Facilities. Adoption of Modern Designs / Technology and Energy Saving Equipments / Devices to avoid obsolescence of Machinery, etc. Making improvement in technology like Diffuser System to gravity Cooling System / Fin Coil system etc. 2. The capacity of the cold storage may vary from 10 metric tones (MT) to 5000 MT depending upon volume, value of commodities stored, technical feasibility, economic viability etc. In the case of pre-cooling units and controlled Atmosphere / Modified Atmosphere Stores the Capacity may be even below 10 MT. 3. NABARD has decided to restrict the payment of subsidy for a maximum capacity of 5000 MT irrespective of the fact whether the capacity created is more than 5000 MT. In such case, pro-rata cost for capacity of 5000 MT has to be worked out and the subsidy equivalent to lower of the 25% of this pro-rata cost or Rs.50 lacs (maximum subsidy provided) is being sanctioned by NABARD. The methodology prescribed by NHB. 4. Need based working capital finance can also be extended for the cold storage units under Banks usual terms and conditions. Classification :

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Loans to storage units, including cold storage units, which are designed to store agricultural produce / products, irrespective of their location, is treated and classified as Indirect Finance to Agriculture under priority Sector.

27. SCHEME FOR DEVELOPMENT AND STRENGTHENING OF INFRASTRUCTURE FACILITIES FOR PRODUCTION AND DISTRIBUTION OF SEEDS
CENTRAL SECTOR SCHEME ON ASSISTANCE FOR BOOSTING SEED PRODUCTION IN PRIVATE SECTOR The National Seed Policy, 2002 has recognized greater role for the private sector in the functioning of the seed industry in the country. Realizing the need for increased seed production with a view to enhance seed replacement rates and particularly in the high volume low value crops it has been proposed in the Tenth Plan to provide assistance for boosting seed production in the private sector. Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India will be the Nodal Ministry. PURPOSE : The assistance, under the scheme, would be limited to creation of infrastructure facilities relating to seed cleaning, grading, processing, seed treating, packaging and storage units as well as for seed testing facilities. This assistance will be primarily for low value and high volume seeds. Eligible organizations :

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Private companies, individual entrepreneurs, self help groups and seed cooperatives. List of Seed Processing Machinery and Condition for Seed Storage Godown: .. Seed Pre-cleaner .. Seed Cleaner-cum-Grader .. Indent Cylinder .. Conveyor System .. Seed Elevator .. Seed Treater .. Seed Drying Unit. .. Seed Holding Bins. .. Weighing Machine. .. Bag Closer .. Other connected equipments/accessories/different sieve sizes .. Seed Testing Laboratory Equipments. Seed godown (i)The construction of seeds godown shall be as per the Central Public Works Department (CPWD) or State PWD specification or any other specification laid down in this behalf. The storage godown shall be properly ventilated, shall have well fitted doors, windows and ventilators and shall be waterproof (control of moisture from floor, walls and roof, etc.). (ii) The seeds godown structure shall have protection from rodents (high pucca elevated platform with pucca staircase). (iii) The seeds godown shall have protection from birds (windows/ventilators with jail). (iv) The openings of the seeds godown such as doors, windows, etc. shall be designed in such a manner that the seeds godown can be sealed for effective fumigation, etc.

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(v) The seeds godown complex shall have an easy approach road, pucca internal roads, proper drainage, arrangements for effective control against fire and theft and also have arrangements for easy loading and unloading of stocks. Credit Linked Assistance (i) Subsidy under the scheme is linked to institutional credit and will be available to such project as are financed by Nationalized Banks and National Cooperation Development Corporation (NCDC) and Regional Rural Banks. Loans to the beneficiary from the bank / NCDC would carry an adequate long-term re-payment period. (ii) Assistance under the scheme shall be available on capital investment on construction of seeds processing plants, purchase and errection / commissioning of seed processing, seed cleaning, seed grading, seed treating, seed packaging machineries and equipment, machinery and equipment for loading and unloading seed bags, construction of seed storage godown and equipment for seed testing laboratories only. Implementing Period The scheme was introduced during 2005-06. The scheme will continue during the current financial year i.e., 2008-09. (e-circular No.347/2008-09 dated 19.09.2008) Implementation The scheme shall be implemented by the Nationalized Banks and NCDC. The National Seeds Corporation will act as Nodal organization for implementation and monitoring of the scheme and for release of funds. Insurance It will be the responsibility of the beneficiary to have the insurance for all the infrastructure. Infrastructure being created shall be insured to the extent of 110 % of the Bank loan by debit to borrowers account after obtaining a consent letter from the borrower. Subsidy

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Subsidy under the scheme shall be provided on the capital investment of the project as follows : (i) Rate of subsidy shall be 25% of the capital investment of the project (ii) Capital investment of the project for the purpose of release of the subsidy shall be calculated as follows: a. for seed godown upto Rs. 2500 per tonne storage capacity or actual cost whichever is lower; b. for all the seed processing machineries and equipment the actual cost will be taken into account; c. for the seed processing plant structure actual subject to a maximum of Rs.3500 per square meter will be allowed. (iii) Subsidy for the project under the scheme shall be released through NSC for project financed by Nationalized Banks and through NCDC for co-operatives. Total subsidy not exceeding 25% of the project cost with a maximum subsidy of Rs.10.00 lakh per unit. Subsidy will be released in two installments (i) The subsidy amount will be released to NSC by Dept of Agriculture & Cooperation in advance. Accordingly, NSC would release the subsidy to the participating bank/NCDC in advance for keeping the same in subsidy reserve fund account of the concerned borrowers, to be adjusted finally against the loan amount of the bank/NCDC on completion of the project. An amount of 50% advance subsidy would be released by NSC to the participating bank/NCDC on submission of a project profile cum claim form within 15 days from the receipt of such form. (ii) The remaining 50% of the subsidy amount would be disbursed to the participating bank(s)/NCDC by NSC after conduct of an inspection by the inspection committee consisting of officials from NSC, participating bank(s)/NCDC. Adjustment of subsidy in borrowers account

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The subsidy released to the bank, for an individual project will be kept in a separate borrower-wise account. The adjustment of subsidy will be back ended. Accordingly, the full project cost including the subsidy amount, but excluding the margin money contribution from the beneficiary, would be disbursed as a loan by the banks. The repayment schedule will be drawn on the loan amount in such a way that the total subsidy amount is adjusted after the full bank loan component with interest is liquidated. No interest chargeable on subsidy portion The subsidy admissible to the beneficiary under the scheme will be kept in the subsidy reserve fund account (borrower wise) in the books of the financing banks. No interest should be charged on this by the bank. In view of this, for purposes of charging interest on the loan component, the subsidy amount should be excluded. The balance lying to the credit of the subsidy reserve fund account will not form part of demand and time liabilities for the purpose of SLR/CRR. Pattern of Assistance For projects financed through banks: (i) Owners contribution* 10% (ii) Subsidy from the Government 25% (iii) Institutional loan from nationalized bank/NCDC 65% *Cost of land can form part of the owners contribution. Assessment : Assessment of the project shall be done by the technical officers of the Bank on the basis of a project report submitted by the promoter. Where required external help may also be obtained for assessing the proposal. If any remuneration need to be given for getting it assessed by external personnel it should be done after obtaining clearance from respective module head for such payments which are within the limits prescribed as upfront fee for agricultural term loans and simultaneously it shall be recovered from the borrower as upfront fee. DSCR : 1.50

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65% of the project cost can be raised as term loan from the financing bank. As the subsidy is back ended, eligible amount of subsidy 25% would be initially allowed as term loan to the beneficiary. The repayment schedule will be drawn on total amount (including subsidy) in such a way that the subsidy amount is adjusted after liquidation of net bank loan (excluding subsidy). Repayment period will depend upon the cash flow and will be upto 11 years including a grace period of one year. The first annual instalment will fall due 23 months from the date of first disbursement. Early payment could be allowed without penalty. Rate of interest to borrowers on term loan shall be as per RBI guidelines. This is applicable from the date of first disbursement of loan. Working capital can also be separately provided for undertaking business by beneficiary. Time Limit for Completion A time limit of 15 months is prescribed for completion of the project from the date of sanction of loan by bank. However, if reasons for delay are justified, a further grace period of 3 months may be allowed by the participating bank/NCDC. If the project is not completed within the stipulated period, the benefit of subsidy shall not be available and advance subsidy has to be refunded forthwith. Refinance Assistance from NABARD NABARD provides re-finance to the extent of 90% of the amount financed as term loan as per their norms and guidelines. Discretionary powers : As per agricultural term loans. Branches to handle : Preferably such accounts shall be placed in nearby ADBs and ABDs. However if such an arrangement is not convenient to the promoter such accounts can be maintained at the branch closest to the promoters office / registered office. Other Conditions

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(i) The participating banks/NCDC will adhere to their own norms for appraisal of projects; (ii) It will be the responsibility of the beneficiaries to have the insurance for the infrastructure being created under the project; (iii) Governments interpretation of various terms will be final; (iv) Any other pre and post inspection may be undertaken to verify physical and financial progress as and when required; (v) Government reserves the right to modify, add and delete any term and condition without assigning any reason. (vi) Subsidy for private sector should be provided primarily for low value/high volume seeds such as wheat, paddy, oilseeds, pulses and other coarse cereals. Procedure to be followed for sanctioning of Project and release of subsidy Projects financed through banks i. An interested beneficiary will submit the project proposal for term loan and subsidy to the bank on an application form as prescribed by our bank along with project report and other documents for appraisal and sanction of loan. Financial Institutions will ascertain the viability of the individual ii. After appraisal and sanctioning and disbursement of the first instalment of loan a brief project profile-cum-claim form for advance subsidy in the prescribed format, along with A copy of banks sanction letter will have to be submitted to the Managing Director, National Seeds Corporation, Beej Bhavan, PUSA Complex, New Delhi. iii. NSC on receipt of project profile cum claim form from the participating bank, will sanction and release 50% advance subsidy, for keeping the same in the Subsidy Reserve Fund Account (borrower-wise). iv. When the project is nearing completion, the beneficiary will have to inform the bank who will initiate action for an inspection by the Committee consisting of officials from the bank and NSC to ensure that the seed infrastructures conforms to technical and financial parameters. Such inspection will be completed within

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one month of the submission of information by the beneficiary. After inspection is conducted, the bank will submit the claim form for final subsidy in the prescribed format to NSC in duplicate. The inspection report of the Committee and completion certificate should be enclosed with the claim form for final subsidy. NSC shall release the final subsidy to banks( which will be replenished by Seed Division, DAC or adjusted against subsidy amount provided to NSC in advance). Monitoring of PROGRESS : i. The monitoring of this component shall be done by NSC and review will be done on a quarterly basis by the Seeds Division of DAC. ii. After crediting the final installment of subsidy in the Reserve Fund of the borrower, a utilization certificate has to be submitted to NSC to the effect that the amount of subsidy received by them has been fully utilized/adjusted in the books of accounts under the sanctioned terms & conditions of the project, within overall guidelines of the scheme. The NSC shall submit the utilization certificates to Seeds Division of DAC. iii. The progress report of the scheme shall be sent by NSC directly to the Seed Division, DAC on a monthly basis.

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28. 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. Sanctioning authority shall use his discretion as to the level of activity and can sanction loan at 20 to 40% of annual turnover. (Realizable value of the property will be decided on the basis of the valuation report, which is not more than three months old, of an approved valuer). For borrowers, who has been sanctioned other limits against mortgage of property,

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Mortgage loan can be extended, against the residual value of the same property subject to the stipulation that The existing loan account is conducted satisfactorily for over 3 years. The eligible amount, i.e., outstandings under the loan already availed and the proposed loan shall be within 65% of the realizable value of the property. Margin : 35% of realizable value of property Processing Fee : Working capital limits (Fund Based +Non Fund Based) For limits above Rs.5 lacs- Rs.250/- per lac or part thereof Maximum Rs.10 lacs. Discretion is vested with CCC to reduce the processing charges by 50%. 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. NOTE: Since this product relies mainly on Mortgage, the documentation has to be proper & the legal clearance of Title should be done systematically. It is often observed that lawyers give legal opinion with qualifying remarks, leaving it to the branch to satisfy themselves on the qualifying remarks. The lawyer should give a report, which takes care of all aspects related to Title. Moreover an Encumbrance Certificate (E.C) should be obtained every 12 months, and valuation once every 3 years. The property to be mortgaged should be business/trading premises, residential property. Agricultural property or open sites outside the urban limits should not be accepted. Care should be taken to ensure that the property is not located in a zone earmarked for demolition by town planning/city development authority or road widening etc. The property in the name of the proprietor/partner/director/or their family members, say spouse, son, daughter, father, mother, brother, unmarried sister, etc., can be accepted as collateral security for the mortgage loan. The owner of the property should also offer his/ her

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personal guarantee for the loan. Moreover the implications of offering the property as security should be clearly explained to the guarantor. Documentation Hypothecation Agreement as applicable to advances under trade and services, Arrangement letter. Sanction As per extant delegation of financial powers, as applicable to the style of disbursements. Interest Rate : As applicable to agricultural advances. Repayment : On Demand. Stock Statement Periodic Stock statements have been dispensed with. However, stock statement will be obtained only once at the time of execution of documents and as on 28th February every year, to evidence Banks hypothecation charge against the current assets of the borrower. Inspection All Immovable properties offered should be inspected by the field staff, once before sanction and at the following periodicity 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. Insurance Insurance for the full market value of the Property to be mortgaged, with Bank clause incorporated will be obtained. Review/Renewal Cash Credit renewal on an annual basis, on the basis of the level of activity, credit

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summation in the account, the interest serviced up to the previous quarter end, and the installments paid.

29. CAPITAL INVESTMENT SUBSIDY SCHEME FOR COMMERCIAL PRODUCTION UNITS OF ORGANIC INPUTS UNDER NATIONAL PROJECT ON ORGANIC FARMING
This scheme is introduced to promote organic farming in the country on a large scale. Under this scheme manufacturing of organic inputs such as biofertilisers, vermicompost, fruit and vegetable waste compost are considered. The scheme will be implemented by National Centre of Organic Farming, Ghaziabad and its six regional offices in colloboration with the Agriculture & Cooperation Dept. of the State Governments. NABARD will be administering the subsidy, monitoring and refinance support for the term loan extended under the scheme. The scheme has been extended for the financial year 2008-09 also. OBJECTIVE

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 To promote organic farming in the country by making available the organic inputs such as biofertilisers, vermicompost and fruit & vegetable waste compost and thereby better return for the produce. To increase the agricultural productivity while maintaining the soil health and environmental safety. To reduce the total dependence on chemical fertilisers by increasing the quantum of quality biofertilisers / compost availability in the country. To set up hatcheries for vermiculture so that the demand of enough earthworm population for on farm production of vermicompost can be met with. To convert the organic waste into plant nutrient resources. To prevent pollution and environment degradation by proper conversion and utilisation of organic waste. OUR APPROACH This activity can take off near cities/ towns which are producing large quantities of organic waste like vegetables / fruit waste as well as in other heavy rainfall areas where abundance of bio-mass is available. These activities can also take off in areas where there is abundant availability of crop waste. Our approach shall be to finance one or two units per region, which can be marketed by our MRTs. Later circles shall focus on areas where the movement of product is good or demand picks up for financing more units, especially in view of the fact that locally available manures are much cheaper than the commercially produced organic manure. ELIGIBILITY New as well as existing units (for expansion / renovation) engaged in the production are eligible under the scheme. Biofertilisers Unit Vermiculture Hatcheries Fruit and Vegetable

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Individuals, group of Individuals, group farmers/growers, farmers/growers, entrepreneurs proprietary and Cooperatives, NGOs, partnership firms, SHGs in the entire cooperatives, fertiliser country industry, seed industry, Companies, Corporations, NGOs, in the entire country PATTERN OF ASSISTANCE TERM LOAN i. Owner's contribution 25%

Waste Compost Unit of NGOs and Private

ii. Subsidy from Government of India 25% subject to the maximum ceiling iii. Bank loan 50% (The financial institution may provide working capital separately for undertaking the business by the entrepreneurs.) SUBSIDY The scheme provides credit linked and back-ended capital investment subsidy @ as described below. Biofertilisers Unit Vermiculture Hatacheries Fruit & Vegetable Waste Compost Unit 25% of the total cost of 25% of the total cost of the project subject to the the project subject to the the project subject to the maximum of Rs 40 lakh maximum of Rs 20 lakh maximum of Rs 1.50 lakh per unit, whichever is per unit, whichever is less per unit, whichever is less less The subsidy released to the bank for individual project will be kept in a separate borrower-wise account. The adjustment of subsidy will be back-ended. Accordingly, the full project cost including the subsidy amount, but excluding the margin money contribution from the beneficiary , would be disbursed as a loan by the banks. The repayment schedule will be drawn on the loan amount in such a way that the total subsidy amount is adjusted after the full bank loan component with interest is liquidated.

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On submission of a project profile cum claim form ,NABARD would release 50% of the subsidy amount to the participating bank in advance for keeping the same in a Subsidy Reserve Fund Account of the concerned borrowers, to be adjusted finally against loan amount of the bank towards the end of the repayment period. The remaining 50% would be disbursed to the participating banks by NABARD after conduct of an inspection by the Joint Inspection Committee consisting of officials from the financing bank, NABARD and NCOF / DAC and their recommendations to that effect. No interest should be charged on the subsidy by the bank. For the purpose of charging interest on the loan component, the subsidy amount should be excluded. The balance lying to the credit of the subsidy reserve fund A/c will not form part of demand and time liabilities for the purpose of SLR / CRR. UTILISATION CERTIFICATE After release of final installment of subsidy, a Utilisation Certificate is required to be submitted by the financing bank certifying that the full amount of subsidy received in respect of the project has been fully utilized. RATE OF INTEREST : As applicable to Ag. advances SECURITY : The security will be as per norms prescribed by RBI from time to time. MORATORIUM PERIOD Biofertilisers Unit Vermiculture Hatacheries Fruit & Vegetable Waste Compost Unit A time limit of maximum A time limit of maximum A time limit of maximum 12 months is prescribed 6 months is prescribed for 12 months is prescribed for completion of the completion of the project for completion of the project from the date of from the date of sanction project from the date of sanction by bank. by bank. sanction by bank.

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However, if reasons for delay are justified, a further grace period of 3 months may be allowed by the participating bank. If the project is not completed within stipulated period, the benefit of subsidy shall not be available and advance subsidy has to be refunded forthwith. REFINANCE ASSISTANCE FROM NABARD: The refinance assistance @ 90% of the term loan (95% in case of SCARDBs in North Eastern Region) would be provided to the financing banks. However, as per the current policy of the Bank refinance shall not be obtained.

30. SCHEME FOR DEVELOPMENT/STRENGTHENING OF AGRICULTURAL MARKETING INFRASTRUCTURE, GRADING AND STANDARDIZATION
1. BACKGROUND This scheme has been formulated to develop marketing infrastructure in the country to cater to the post-harvest requirement of production and marketable surplus of various farm products ,as per the recommendation of Expert Committee set up by the Ministry of Agriculture . This scheme is reform linked and assistance for development of infrastructure projects will be provided in those States/Union Territories which permit

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setting up of agricultural markets in private and cooperative sectors and allow direct marketing and contract farming. In states which have introduced APMC Act, introduction of the scheme would require amendment to the existing APMC Act. The scheme shall also be implemented in states which have not introduced APMC Act at all (eg. Kerala & UTs). 2. OBJECTIVES To provide additional agricultural marketing infrastructure to cope up with the large expected marketable surpluses of agricultural and allied commodities including dairy, poultry, fishery, livestock and minor forest produce. To promote competitive alternative agricultural marketing infrastructure by inducement of private and cooperative sector investments that sustain incentives for quality and enhanced productivity thereby improving farmers income. To strengthen existing agricultural marketing infrastructure to enhance efficiency. To promote direct marketing so as to increase market efficiency through reduction in intermediaries and handling channels thus enhancing farmers income. To provide infrastructure facilities for grading, standardization and quality certification of agricultural produce so as to ensure price to the farmers commensurate with the quality of the produce. To promote grading, standardization and quality certification system for giving a major thrust for promotion of pledge financing and marketing credit, introduction of negotiable warehousing receipt system and promotion of forward and future markets so as to stabilize market system and increase farmers income. To promote direct integration of processing units with producers.

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 To create general awareness and provide education and training to farmers, entrepreneurs and market functionaries on agricultural marketing including grading, standardization and quality certification. 3. SALIENT FEATURES OF THE SCHEME The scheme will be implemented in those States which amend the APMC Act, wherever required, to allow direct marketing and contract farming and to permit setting up of markets in private and cooperative sectors. 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. Types of marketing infrastructure for purpose of the scheme may comprise of any of the following: Functional infrastructure for collection/assembling, drying, cleaning, grading, standardization, SPS (Sanitary & Phytosanitary) measures and quality certification, labeling, packaging, ripening chambers, retailing and wholesaling, value addition facilities (without changing the product form) etc. Transportation facility will not be covered under the scheme; Market user common facilities in the project area like shops/offices, platforms for loading/ unloading/ assembling and auctioning of the produce, parking sheds, internal roads, garbage disposal arrangements, boundary walls, drinking water, sanitation arrangements, weighing & mechanical handling equipments, etc.; Infrastructure for Direct marketing of agricultural commodities from producers to consumers/processing units/ bulk buyers, etc.; Infrastructure for supply of production inputs and need-based services to the farmers;

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 Infrastructure (equipment, hardware, gadgets, etc) for E-trading, market intelligence, extension and market oriented production planning Mobile infrastructure for post-harvest operations (excluding transport equipment) will be eligible for assistance under the scheme. ELIGIBLE PERSONS The assistance will be available to individuals, Group of farmers/growers/consumers, Partnership/Proprietary firms, Non-Government Organizations (NGOs), Self Help Groups (SHGs), Companies, Corporations, Cooperatives, Cooperative Marketing Federations, Local Bodies, Agricultural Produce Market Committees & Marketing Boards in the entire country. Bank assisted projects of State agencies, including projects refinanced/ co -financed by National Bank for Agriculture and Rural Development (NABARD) for strengthening / modernization of existing marketing infrastructure would also be eligible for assistance under the scheme. LAND AND LOCATION Under the scheme, the entrepreneur will be free to locate the marketing infrastructure project at any place of his choice determined on the basis of economic viability and commercial considerations. However, the project should provide direct service delivery to producers/farming community in post-harvest management/marketing of their produce. Cost of land in infrastructure projects will be restricted to a maximum of ten per cent of the project cost in rural areas and to twenty per cent in municipal areas and it would form part of the owners contribution. The entrepreneur will not alienate the land during the period of the loan for any purpose other than the purpose for which the loan is sanctioned. CREDIT LINKED ASSISTANCE

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 Assistance under the scheme would be credit linked and subject to sanction of the infrastructure project by Commercial/Cooperative/Regional Rural Banks based on economic viability and commercial considerations. Assistance under the scheme shall be available on capital cost of the project only. Banks/National Cooperative Development Corporation (NCDC) will, however, be free to finance other activities/working capital requirement to meet various requirements of the farmers/entrepreneurs. SUBSIDY Rate of subsidy & maximum amount of subsidy shall be 25% of the capital cost of the project & restricted to Rs.50 lakh for each project. In case of North Eastern States, hilly and tribal areas and in the States of Uttaranchal, Himachal Pradesh, Jammu and Kashmir and entrepreneurs belonging to Scheduled Caste (SC)/Scheduled Tribe (ST) and their cooperatives, the rate of subsidy shall be 33.33% of the capital cost of the project & maximum amount of subsidy shall be Rs.60 lakh for each project. In respect of infrastructure projects of State Agencies, there will be no upper ceiling on subsidy to be provided under the scheme. State Agencies may take up infrastructure projects from their own funds by dovetailing the subsidy under the scheme, with bank loan or without borrowing from the financial institution. However, the stipulation of credit linkage and sanction of the infrastructure project by the Commercial/ Cooperative/Regional Rural Banks will be optional for the infrastructure project taken up by the State Marketing Boards/APMCs and other State agencies. RELEASE OF SUBSIDY Subsidy for the projects under the scheme shall be released through NABARD for projects financed by the Commercial, Cooperative and Regional Rural Banks, Agricultural Development Finance Companies (ADFCs), scheduled Primary Cooperative Banks (PCBs), North Eastern Development Financial Corporation (NEDFI) and other institutions eligible for refinance from NABARD and through

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NCDC for projects financed by NCDC or by Cooperative Banks recognized by NCDC in accordance with its eligibility guidelines. In case, where the State Marketing Boards/ APMCs or other State Agencies propose to invest their own funds to the extent up to 75% of the project cost without availing any loan, the subsidy will be released to them directly by Directorate of Marketing and Inspection (DMI) in two installments depending on the progress of the work. ADJUSTMENT OF SUBSIDY IN BORROWERS ACCOUNT The subsidy released to the bank/NCDC for an individual project will be kept in a separate borrower-wise account. The adjustment of subsidy will be back ended. Accordingly, the full project cost including the subsidy amount, but excluding the margin money contribution from the beneficiary, would be disbursed as a loan by the banks. The repayment schedule will be drawn on the loan amount in such a way that the total subsidy amount is adjusted after the full bank loan component with interest is liquidated. The repayment schedule prescribed at the time of sanction of the project will not be allowed to be altered by the financing bank without the prior approval of the Head Office of the DMI on the recommendation of NABARD/NCDC. NO INTEREST CHARGEABLE ON SUBSIDY PORTION The subsidy admissible to the promoter under the scheme will be kept in the Subsidy Reserve Fund Account (Borrower-wise) in the books of the financing banks. No interest would be charged on this by the bank. In view of this, for purposes of charging interest on the loan component, the subsidy amount should be excluded. IMPLEMENTATION PERIOD The scheme was implemented with effect from 20-10-2004 and will be in operation till 31.03.2012. (e-circular No.454/2008-09 dated 31.10.2008) IMPLEMENTING AGENCY The scheme shall be implemented by the Directorate of Marketing & Inspection (DMI), an Attached Office of Department of Agriculture and Cooperation.

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Mode of Release 50% of the subsidy amount will be released to NABARD by Department of Agriculture and Cooperation in advance. Accordingly, NABARD would release subsidy to the participating banks in advance for keeping the same in a Subsidy Reserve Fund Account of the concerned borrowers, to be adjusted finally against loan amount of the bank on completion of the project. This amount of 50% subsidy would be released by NABARD to the participating bank on submission of a project profile-cum-claim form. The remaining 50% of the subsidy amount would be disbursed to the participating bank (s) by NABARD after a Joint Inspecting Committee comprising of officers from NABARD, participating bank and Directorate of Marketing & Inspection (DMI) in the concerned State, conducts an inspection. 4.INSTITUTIONAL LENDING A. Eligible financing institutions Commercial banks, Regional rural banks (RRBs), State cooperative banks (SCBs), State cooperative agricultural and rural development bank (SCARDBs), Agricultural development finance companies (ADFCs), Northeastern development finance corporation (NEDFI) and such other institutions which will be eligible for refinance from NABARD. Cooperative societies and cooperative banks recognized by NCDC in accordance with its eligibility guidelines. B. Term Loan

Loan amount: Minimum 50% of the project cost (46.67% in case of NE states, hilly and tribal areas and for entrepreneurs belonging to SC/ST and their cooperatives) can be raised as term loan from the financing banks. As the subsidy is back-ended, eligible amount of the subsidy (25%/33.33%) would initially be allowed as term loan to the beneficiary. The repayment schedule will be drawn on the total loan amount (including subsidy) in such a way that the subsidy amount is adjusted after liquidation of net bank loan (excluding

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subsidy). State Agricultural Produce Marketing Boards/ Committees or other State agencies will be free to decide as to the quantum of loan or invest their own funds in lieu of loan as per their requirement.

Repayment period will depend upon the cash flow and will be up to 11 years including a grace period of two years. The first annual installment will fall due after 24 months from the date of first disbursement.

Rate of interest to borrowers on term loan shall be at PLR of the bank (or the lead bank) as per RBI guidelines. Interest will be chargeable from the date of the first disbursement of loan.

Working capital: The financial institution may also provide working capital separately for undertaking business by entrepreneurs.

5.TIME LIMIT FOR COMPLETION A time limit of 18 months is prescribed for completion of the project from the date of disbursement of the first installment of loan by the financial institution or from the date of approval of the project by the Committee. However, if reasons for delay are justified, a further grace period of 6 months may be allowed by the financial institution. However, in case of large integrated agricultural marketing infrastructure projects involving total outlay of Rs.2 crore or more and requiring phasing, a time limit of maximum of 36 months may be prescribed for completion of the project from the date of disbursement of the first installment of loan by the financial institution. If the project is not completed within the stipulated period benefit of subsidy shall not be available and advance subsidy will have to be refunded forthwith. 6. REFINANCE ASSISTANCE FROM NABARD For Agricultural Marketing Infrastructure projects, NABARD would provide refinance to Commercial Banks/RRBs/ADFCs/SCBs/SCARDBs and such other eligible institutions @ 90% of the amount financed by the banks as term loan. However, quantum of refinance would be 95% in case of SCARDBs in north-

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eastern region. The rate of interest on refinance will be decided by NABARD from time to time and at present it is @ 6.75% per annum. 7. OTHER CONDITIONS Projects under the scheme may be treated as infrastructure for financing. The participating banks/NCDC/NABARD etc., will adhere to their own norms for appraisal of projects. It will be the responsibility of the owner to have the insurance of the project unit. A signboard at the site Assisted under the Scheme of Agricultural Marketing Infrastructure of Ministry of Agriculture, Government of India will be exhibited. Governments interpretations of various terms will be final. Besides Joint Inspection Committee (JIC) inspection, pre and post completion inspections of the project may be undertaken to verify physical, financial and operational progress, as and when required. Government reserves the right to modify, add and delete any term and condition without assigning any reason.

8. PROCEDURE TO BE FOLLOWED FOR SANCTIONING OF PROJECT FINANCED THROUGH BANKS/NABARD AND RELEASE OF SUBSIDY

An interested promoter will submit the project proposal for term loan and subsidy to the bank on an application form as prescribed by the concerned bank along with project report and other documents for appraisal and sanction of loan. A copy of the proposal shall also be endorsed by the promoter to Sub

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office/ Regional Office of DMI Bank after appraisal and sanctioning of project and disbursal of first installment of loan will furnish a brief project profilecum-claim form for advance subsidy in the prescribed form I along with a copy of banks sanction letter to RO, NABARD with a copy to the SubOffice/Regional Office of DMI . NABARD on receipt of project profile-cum-claim form from the participating bank, will sanction and release 50% advance subsidy to the participating bank for keeping the same in the Subsidy Reserve Fund Account (Borrower-wise). NABARD will forward a copy of the sanction and project profile to the Head Office of DMI project-wise for replenishment or adjustment against advance subsidy provided by DMI to NABARD. The release of subsidy by NABARD will be subject to availability of funds from DMI. When the project is nearing completion, the promoter will inform the bank who will initiate action for an inspection by a Joint Inspection Committee consisting of officials of bank, NABARD and DMI to ensure that the executed project conforms to technical and financial parameters. After joint inspection is conducted, the bank will submit the claim for final subsidy in the prescribed format, in triplicate, with a copy to concerned Regional Office/Sub-Office of DMI. The inspection report of the Joint Inspection Committee and completion certificate should be enclosed with the claim form for final subsidy. NABARD shall release the final subsidy to banks, which will be replenished by DMI or adjusted against the subsidy amount provided to NABARD in advance. 9. MONITORING The monitoring of each project shall be done by DMI through its Regional/ Sub offices and review will be done on a monthly basis with NABARD/NCDC.

A Joint Inspection Committee consisting of officials from NABARD, NCDC, participating bank(s), as the case may be, and DMI would inspect the project work within the overall scope of the operational guidelines of the scheme and

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would submit its report in the format which should be enclosed with Annexure For this purpose, the promoters/participating banks/NABARD will initiate necessary action to get the inspection conducted on the project site by the Joint Inspection Committee at the time when the project is completed, so as to avoid any delay in release/adjustment of subsidy. After crediting the final installment of subsidy in the reserve fund of the borrower, a utilization certificate is required to be submitted by the participating bank to NABARD/NCDC as the case may be, to the effect that amount of subsidy received by them has been fully utilized and adjusted in the books of account under the sanctioned terms and conditions of the project, within the overall guidelines of the scheme. 10. GENERAL AWARENESS AND TRAINING PROGRAMME General awareness, publicity and training programmes for farmers, market functionaries and entrepreneurs in construction, maintenance and operation of infrastructure projects as also agricultural marketing in general including grading and standardization, shall be taken up through Ch. Charan Singh National Institute of Agricultural Marketing, Jaipur and other national and state level institutions/Universities. (FOR DETAILS OF SCHEME, FORMAT & ANNEXURES PLEASE REFER THE ORIGINAL CIRCULAR)

31. SCHEME FOR DEBT SWAPPING OF BORROWERS

(e-Cir. Sl. No. : 204/200809 Circular No. : NBG/ABU/PDMDEBTSWAP/8/2008 09) Introduction : Most of the farmers continue to be heavily indebted to noninstitutional lenders including money lenders. Such farmers are unable to come out

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of the debt trap on account of poor productivity, low margin/income, exhorbitant rate of interest charged by money lenders etc. In order to help such farmers this revised Debt Swapping Scheme has been introduced with enabling provisions for (i) Debt Swapping and (ii) Fresh crop loan. Objective : (i) To mitigate acute distress, farmers might be facing due to the heavy burden of debt from non-institutional lenders (ii) To extend finance to such farmers for paying off loans taken from noninstitutional lenders (e.g. money lenders etc.) and (iii) 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 scheme will be for farmers owning land existing or prospective. The quantum of loan granted shall be 100% if the debt is on account of cultivation or agri activity or Rs.50,000/- whichever is lower. This will be a secured Agri Term Loan. Simultaneously, the applicant shall be financed for Crop Production through Kisan Credit Card which includes additional 20% of the production limit to meet contingent requirements or / and Agriculture Term Loan as per the Banks guidelines to pursue any other productive activity in agriculture. Amount of Debt : The amount of debt of the farmer is assessed based on the stamped affidavit given by the applicant farmer which should invariably indicate purpose for which it was taken, documents / security offered to the non-institutional lender, amount of loan taken, interest rate, present outstanding etc. Method of assessment: For the indebtedness intended to be taken over from non institutional lenders, following treatment shall be adopted:

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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 (Net profit + interest) Gross DSCR = ---------------------------------------------------(Aggregate Installment in a year + Interest) Where, Net profit = Projected post development income from agriculture and non agriculture sources LESS production and family expenses of the farmer in a year Care should be taken to ensure that the debt of the borrower from the noninstitutional source is genuine and not a fictious one created by the borrower to avail this facility. Sanctioning authority: The Branch Manager/Division Manager only should sanction loans under this scheme strictly, within their delegated powers. Disbursement: The loan amount should be disbursed preferably to the money lenders/non-institutional lenders. An appropriate receipt for the discharged debt from the money lender/non-institutional lender should be obtained and kept with the loan documents at the Branch. Security: All the existing security available with us both primary & collateral should be extended to cover the loan under the proposed scheme also. Charge over assets and documents pledged / mortgaged with the moneylenders, noninstitutional lender etc. after the dues of the money lenders / non-institutional lenders are cleared. Collateral security by mortgage / charge on agriculture property shall be taken for this loan. Documents: AB 1(simple), AB 2, Arrangement letter and AB 3 - Mortgage deed/charge on land. Interest: As applicable to Direct Agricultural advances. Repayment: Term loan will be repayable in yearly / half yearly installments in three to five years. Installments should coincide with the cash flow of the farmer. Other conditions:

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o A letter from the non-institutional lender confirming the facts mentioned in the affidavit given by the farmer borrower. OR o Branch officials/Branch Manager should make proper enquiries and satisfy themselves thoroughly with the genuineness of the request for the loan under the scheme. This is to ensure that the loans are granted to farmers who are genuinely distressed due to heavy debt burden for reasons mentioned above. o Affidavit:. This should be stamped as per stamp duty applicable in the State and should be attested either before Oath Commissioner or before a Notary Public. The specimen may be suitably modified considering the requirements of the State, in consultations with LHOs Law Dept., if need be. o Arrangement letter, Inspection and other conditions: As per norms applicable to Direct Agricultural advances. o GoI has fixed a target of 3 % of agricultural credit to be earmarked for giving loans for Debt Swapping of farmers from FY 2008-09 onwards. o The modified scheme will carry the CBS General Ledger code as 6230-1211.

DOS AND DONTS FOR GRAHAK MITRA

Dos

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a. b. c. d. e. f. of view g. h. i.

Pay attention to walk-in customers. No one should remain Salutation according to the individual customer, I.e., either in Receive the customer with a smile Proactively ask customer what help he requires Speak softly and pay full attention to him while talking Listen to customer with full attention and try to understand his point Maintain your cool, even if the customer is disturbed and try to Guide the customer to the concerned desk, so that he can get Keep an eye in the main banking hall to ensure customers are not in

unattended English/ Local language

pacify him, and note down his complaint appropriate service/ product waiting anywhere Donts o o o o Do not engage in unnecessary conversations with the Do not be too friendly with the customer Dont ask too many questions; try to provide him with the Do not spend too much time with one customer or in customers; Maintain professional relationships

required information proactively personally attending to his work, at the cost of other customers, who go unattended in the meantime

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ROTATION OF DUTIES (i) A trained Grahak Mitra should perform the role for a minimum period of 6 months. However, if the performance of Grahak Mitra is found to be good, he may be continued in the role for a period of one year. (ii) If a Grahak Mitra is found to be not performing his role properly, the controllers in consultation with Circle BPR IT may replace the Grahak Mitra prematurely. However, the new Grahak Mitra should fulfill the selection criteria and be given training for 2 days before being asked to perform his duties. The BPRIT should provide training as well as hand holding support. (iii) In the event Grahak Mitra is being changed with a new member due to his overstay in the job, the successful Grahak Mitra should provide handholding support to the new Grahak Mitra, if already trained earlier, for a period of one week, so that the new Grahak Mitra stabilizes in his role. IMPORTANT TIPS 1. Meeting of the Branch Managers of the identified branches must be held for explaining the concept, before selection of Grahak Mitras 2. Selection of staff to work as Grahak Mitra should be done strictly as per the guidelines given in the concept paper. 3. Full training must be imparted to the selected candidates up front and only trained staff be permitted to function as Grahak Mitra at a Branch. 4. DGM/ AGM should conduct a staff meeting at each of the branch before launch of the initiative to explain the new role and need for full staff support to the new role holder. Without the back end support from all the members of the staff, Grahak Mitra will not be able to make any significant impact in image building of the branch. 5. The Grahak Mitra desk, as per the design suggested, should be placed in the customer area near the entrance so that all the customers entering the branch can meet him first.

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6. Grahak Mitra should be provided with the badges designed by BPR Team. They should wear these alongwith Identity cards and should always dress neatly. 7 .Leaflets / brochures/forms for various personal segment products should be available with the Grahak Mitra for distribution. These should be kept in such a way so that customers can pick them up from the desk without asking for it. One set of leaflets may be displayed on a pin up board near the Grahak Mitra desk. 8. In order to ensure desired performance of Grahak Mitra, it is required that number of customers entering at the branch and percentage of them handled by the Grahak Mitra are recorded regularly. This can be done with the help of a counting machine by Bank Guard easily. This is an inexpensive machine. (Cost around Rs. 60/-) 9. Further, number of ATM/ Internet banking applications collected by the Grahak Mitra and SWOs should be recorded and reviewed by the Branch Manager. It must be ensured that the applications received are uploaded same day to respective entities for further action within the committed time. 10. Grahak Mitras should be made aware of the bench marks decided for their role in all the training programmes. 11. Grahak Mitras should perform their complete role including migration to alternate channels like ATM and Drop Box. 12. The Controllers should monitor the weekly data of performance of Grahak Mitra viz-a-viz benchmarks to ensure that the role is properly discharged. 13. Grahak Mitras should be positioned regularly after launch of the initiative. 14. Grahak Mitras should be given only enquiry rights for operating Bank Master/ CBS Terminals.

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SWARNAJAYANTI GRAM SWAROZGAR YOJANA =SGSY= SCHEME

========================================================== Salient features of Swarnajayanti Gram Swarozgar Yojana (SGSY) Scheme The Ministry of Rural Development, Government of India have launched a new Programme known as Swarnajayanti Gram Swarozgar Yojana (SGSY) by restructuring the following existing schemes: 1. Integrated Rural Development Programme (IRDP) 2. Training of Rural Youth for Self Employment (TRYSEM) 3. Development of Women and Children in Rural Areas (DWCRA) 4. Supply of Improved Toolkits to Rural Artisans (SITRA) 5. Ganga Kalyan Yojana (GKY) 6. Million Wells Scheme (MWS) 1. The Scheme The SGSY Scheme is operative from 1st April, 1999 in rural areas of the country. SGSY is a holistic Scheme covering all aspects of self employment such as organisation of the poor into Self Help Groups, training, credit, technology, infrastructure and marketing. The scheme will be funded by the Centre and the States in the ratio of 75:25 and will be implemented by Commercial Banks, Regional Rural Banks and Co-operative Banks. Other financial institutions, Panchayat Raj Institutions, District Rural Development Agencies (DRDAs), NonGovernment Organisations (NGOs), Technical institutions in the district, will be involved in the process of planning, implementation and monitoring of the scheme. NGOs help may be sought in the formation and nurturing of the Self Help Groups (SHGs) as well as in the monitoring of the progress of the Swarozgaris. Where feasible their services may be utilised in the provision of technology support, quality control of the products and as recovery monitors cum facilitators.

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The Scheme aims at establishing a large number of micro enterprises in the rural areas. The list of Below Poverty Line (BPL) households identified through BPL census duly approved by Gram Sabha will form the basis for identification of families for assistance under SGSY. The objective of SGSY is to bring the assisted poor families (Swarozgaris) organising the above the poverty line by ensuring appreciable sustained income over period of time. This objective is to be achieved by interalia rural poor into Self Help Groups (SHGs) through the process of such as those with land, landless labour, social mobilisation, their training and capacity building and provision of income generating assets. The rural poor educated unemployed, rural artisans and disabled are covered under the scheme. The assisted poor families known as Swarozgaris can be either individuals or groups and would be selected from BPL families by a three member team consisting of Block Development Officer (BDO), Banker and Sarpanch. SGSY will focus on vulnerable sections of the rural poor. Accordingly the SC/ST will account for at least 50 percent, ,women 40 percent, and the disabled 3 percent of those assisted. 2. Eligibility The list of Below Poverty Line (BPL) households identified through BPL census duly approved by Gram Sabha will form the basis for identification of families for assistance under SGSY.The rural poor such as those with land, landless labour, educated unemployed, rural artisans, Self Help Groups and disabled are covered under the scheme. 3. Skill Up gradation / Training Once the person or group of persons has been identified for assistance, their training for Minimum Skill Requirement (MSR) should be ensured. 4. Activity Clusters, Key Activities The focus under the scheme should be on development of activity clusters with emphasis on key activities identified in the block, both for group as well as individual assistance. The DRDAs shall prepare directory of the selected key

248

activities in the District (shelf of projects), which will be consolidated at the State level for preparation of directory of selected key activities. On farm activities to be assisted would include minor irrigation such as open dug well/bore/tube well/lift irrigation/check dam etc. Non-farm activities will include those activities that result in the production of goods/services that have ready market. The unit cost as fixed by the regional Committees of NABARD should be taken into consideration as indicative cost while fixing the unit cost for the farm sector. In regard to loans falling under Industry, Service and Business (ISB) Sector, the responsibility of fixing the unit cost and other techno-economic parameters is of the District SGSY Committee.

5. Self-Help Groups (SHGs)

The Self Help Groups shall be organised by Swarozgaris drawn from the BPL list approved by Gram Sabha. The assistance (loan cum subsidy) may be extended to individuals in a group or to all members in the group for taking up income generation activities. Group activities will be given preference and progressively majority of the funding will be for Self Help Groups. Half the groups formed at block level should be exclusively women groups. Self Help Groups go through various stages of evolution viz. Group formation, Group Stabilization, Micro Credit stage and Micro Enterprise Development stage. Under the scheme, generally a Self Help Group may consist of 10-20 persons. However, in difficult areas identified by the State Level SGSY Committee this number may vary from 5-20. Generally all members of the group should belong to families below the poverty line (BPL). However, deviation to a maximum of 30% in exceptional cases is permitted provided they are acceptable to the BPL members of the group. The Above Poverty Line (APL) members will not be eligible for the subsidy under the scheme. The BPL families must actively participate in the management

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and decision making, which should not ordinarily be The group should operate a group account preferably in their service area bank branch, so as to deposit the balance amounts left with the groups after disbursing loans to its members. The group should maintain simple basic records such as minutes book, attendance register, loan ledger, general ledger, cashbook, bank passbook and individual pass books. The group may be of disability specific or with diverse disability or combination of both disabled and non disabled persons below poverty line. In cases where the size of the SHG is large sub groups within the large group may be considered for financing by the banks under the SGSY. 6. Definition of Family and Willful Defaulter The Family would consist of members of a household and united by ties of marriage, blood and adoption. The family would consist of husband, wife, dependent parents /sons /daughters / brothers and sisters. The moment a parent/son/daughter/brother/sister is no longer dependent and has a separate household, he will no longer be a member of the same BPL family. A household having two kitchens and two ration cards should not be treated as a family and the existence of two kitchens or two ration cards in the same house is an indication of two families. As far as the term Wilful defaulter is concerned, it is defined as one who is capable of repaying the loan, but has been defaulting intentionally and not repaying the loan deliberately and wilfully. 7. Revolving Fund a) SHGs that are in existence for about six months and have demonstrated the potential of a viable group enters the third stage, wherein it receives the Revolving Fund from DRDA and banks as cash credit facility. The DRDAs may release subsidy, which is equal to the group corpus with a minimum of Rs. 5000/- and a maximum of Rs. 10000/- linked with bank credit. The banks would sanction credit, which would be in multiples of the group corpus and could go up to four

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times of the group corpus as cash credit facility based on the absorption capacity and credit worthiness of the group. Subsequently, if it is found that the group has not been able to reach the micro enterprise stage and requires further financial support to continue in the micro finance stage for some more time, performance of such groups may be got evaluated. In the evaluation if it is observed that the group has been successfully utilising the revolving fund, they could be considered for sanction of further doses of subsidy fund up to a maximum of Rs. 20000/inclusive of previous doses linked with bank credit. The subsidy of Rs. 20000/released by DRDA will be adjusted against the loan at the end of the cash credit period on the request of the group. b) The group corpus would be defined as the total amount available with the group inclusive of cash with the group, amount in Savings Bank account of the group, loans outstanding against members of the group and interest earned on the loans as well as deposits. c) The revolving fund is provided to the groups to augment the group corpus so as to enable larger number of members to avail loans and also to facilitate increase in the per capita loan available to the members. The revolving fund imparts credit discipline and financial management skills to the members so that they become credit worthy. SHGs that have demonstrated their successful existence, will receive assistance for economic activities under the scheme. 8. Loan Amount The size of loan under the scheme would depend on the nature of project. There is no investment ceiling other than the unit cost i.e. investment requirement worked out for the project. The loans under the scheme would be composite loan comprising of Term Loan and working capital. The loan component and the admissible subsidy together would be equal to total project cost. Under any circumstance under financing is to be avoided. Swarozgaris will be given the full amount of loan and subsidy and they will have the freedom to procure the assets

251

themselves. Disbursements up to Rs.10,000/- under Industry, Service and Business (ISB) sector may be made in cash where a number of items are to be bought. 8.1 Group loans Ideally, under the group loaning, the group should take up single activity, but if there is a necessity, the group could also take up multiple activities under the group loaning. In either case, loan will be sanctioned in the name of the group and the group stands as guarantee to the bank for prompt repayment of loan. The group is entitled to subsidy of 50% of the project cost subject to per capita subsidy of Rs. 10000/- or Rs. 1.25. 8.2 Multiple doses of credit Emphasis is laid on multiple dose of assistance. This would mean assisting a Swarozgari over a period of time with second and subsequent dose(s) of credit enabling him/her to cross the poverty line as also access higher amounts of credit. Subsidy entitlement for all doses taken together should not exceed the limit prescribed for that category. The second and subsequent doses may be granted by the same bank or any other bank during the currency of first/earlier loan provided dose. 9. Interest Rate Loans under the Scheme will carry interest as per the directives on interest rates issued by Reserve Bank of India/Bank from time to time. 10. Loan application (a) Time limit for disposal of applications: Loan applications under the scheme should be disposed of within the prescribed time limit of 15 days and at any rate not later one month. It should be ensured that documentation process is kept simple to avoid hardship to the beneficiaries and consequent delay in disposal of applications. (b) Rejection of loan applications: the bank is satisfied about the financial discipline of the first/earlier

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If some loan applications are rejected by the branch managers, the reason for rejection should be clearly recorded on the application form itself and the relevant application should be returned to the sponsoring authority immediately for their information and further action as they deem necessary. Branch Managers may be vested with adequate discretionary powers to sanction proposals under the scheme without reference to any higher authority. 11. Assistance to existing IRDP borrowers (i)The existing IRDP borrowers may also be considered for second/multiple dose of assistance under SGSY if they have failed to cross the poverty line because of no fault of theirs. 12. Insurance Cover Insurance cover is available for assets/live stock bought out of the loan. Swarozgaris are covered under the Group Insurance Scheme. For availing the group insurance coverage by the SGSY Swarozgaris, the maximum age of Swarozgaris at the time of sanction has to be kept at 60 years of age. The insurance coverage, however, would be for five years or the loan is repaid, whichever is earlier, irrespective of the age of Swarozgaris at the time of sanction of loan. 13. Security Norms For individual loans upto Rs. 50000/- and group loans upto Rs. 5 lakhs, the assets created out of bank loan would be hypothecated to the bank as primary security. In case where movable assets are not created, as in landbased activities such as dug well, minor irrigation etc., mortgage of land may be obtained. Where mortgage of land is not possible, third party guarantee may be obtained at the discretion of the bank. For all individual loans exceeding Rs, 50000/- and group loans exceeding Rs. 5 lakhs, in addition to primary security such as hypothecation/mortgage of and or third party guarantee as the case may be, suitable margin money/ other collateral security in the form of insurance policy; marketable security/deeds

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of other property etc. may be obtained at the discretion of the bank. The upper ceiling of Rs. 5 Lakh is irrespective of the size of the group or per capita loan to the group. While deciding the limit for collateral security, the total project cost (bank loan plus Government subsidy) should be taken into consideration by banks. 14. Subsidy Subsidy under SGSY will be uniform at 30 percent of the project cost, subject to a maximum of Rs. 7,500/-. In respect of SC/STs it will be 50 percent of the project cost subject to a maximum of Rs. 10,000/-. The group is entitled to subsidy of 50% of the project cost subject to per capita subsidy of Rs. 10000/- or Rs. 1.25 lakhs, whichever is less. There will be no monetary limit on subsidy for irrigation projects. Subsidy under SGSY will be back ended. Banks should not charge interest on the subsidy amount. DRDAs will be opening savings banks accounts with the principal participating bank branches for administration of subsidy. These accounts are to be reconciled every three months and they will be subject to annual audit. 15. Post Credit Follow-up Loan Pass books in regional languages may be issued to the Swarozgaris which may contain all the details of the loans disbursed to them. Bank branches may observe one day in a week as non public business working day to enable the staff to go to the field and attend to the problems of Swarozgaris. 16. Risk Fund for Consumption Credit The scheme provides for the creation of Risk Fund with 1 percent of SGSY funds at District level. Consumption loans not exceeding Rs. 2000/- per Swarozgari would be provided by the banks. 17. Repayment of Loan All SGSY loans are to be treated as medium term loans with minimum repayment period of five years. Installments for repayment of loan will be fixed as per the unit cost approved by the NABARD/Dist. SGSY Committee. There will be a moratorium on repayment of loans during the gestation period.

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Repayment installments should not be more than 50 percent of the incremental net income expected from the project. Swarozgaris will not be entitled for any benefit of subsidy if the loan is fully repaid before the prescribed lock-in period. The repayment period for various activities under SGSY can broadly be categorised into 5, 7 and 9 years depending on the project. The corresponding lock-in period would be 3, 4 and 5 years respectively. If the loan is fully repaid before the currency period, the Swarozgaris will be entitled only to pro-rata subsidy. 18. Recovery Prompt recovery of loans is necessary to ensure the success of the programme. Banks shall take all possible measures, i.e., personal contact, organisation of joint recovery camps with District Administration, legal action, etc to ensure recovery. While reporting the recovery under SGSY, Banks should not add the recovery under IRDP with that of SGSY. Recovery figures under the SGSY should be maintained/ calculated separately. Further, within SGSY, advances and recovery of loans under group/ individual finance should be maintained separately to get a proper feed back. 19. Service Area Approach The district SGSY Committee set up under the Scheme has been authorised to reallocate the villages, which are either not covered by any bank branch or where the concerned branch is not able to perform for any reason whatsoever. The district SGSY Committees decision on reallocation would be placed before DCC for its consideration and further necessary action. The Service Area branches may be grouped block wise without disturbing their Service Area identities or their obligation to prepare Village Credit Plans/ Service Area Plans so that borrowers will have the flexibility to approach other branches in a block in the event of inability of the concerned Service Area branch to adequately meet their requirements. The primary responsibility for financing borrowers within the Service Area will be that of the concerned Service Area branch. Borrowers will first approach their Service Area branch for credit

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facilities and in the event of the concerned Service Area branch not being in a position to finance them, it will be incumbent on it to give a No Dues Certificate to the concerned borrower who will, then, be free to approach any other branch in the block for credit support. If the Service Area branches do not issue No Dues Certificate within 15 days from the date of receipt of the application, the borrower will be free to approach any other branch in the block for his credit requirements without production of No Dues Certificate from the concerned Service Area branch. Banks should follow these Service Area Approach guidelines scrupulously.

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AGRI BUSINESS::TRACTOR UPGRADATION (SANJEEVANI) FINANCE FOR REPAIRS, MAINTENANCE AND ADDITION OF NEW IMPLEMENTS ETC. TO TRACTORS
Tractor financing is a major activity under agriculture portfolio. It constitutes 15% share of the total agricultural advances of our Bank. As on 30th June, 2009, we have total number of 2.88 lakh tractor loan accounts with an outstanding amount of Rs. 6269 crores. Generally, tractors carry 2/3 year warranty and hence, do not need any funding for maintenance / major repairs during warranty period. On the other hand those farmers having tractors older than three years may need funds for repairing. 3. As of now there is a provision of 10% of the invoice amount to be sanctioned in the ATL, abinitio, for meeting future needs of maintenance and repairs. Inclusion of 10% of invoice amount towards future requirements is felt insufficient due to increase in prices of spares and other emerging requirements for acquiring new implements in the meanwhile and hence, it is felt necessary that a separate loan be sanctioned to meet such requirements. Accordingly, we have modified the tractor loan product, where the existing 10% provision in the tractor loan along with tractor financing is withdrawn and another new product, Tractor up gradation (SANJEEVANI) is introduced to meet the requirements of maintenance, up gradation, refurbishment as well as for addition of new implements. This product will be made available only to Standard and satisfactorily conducted ATL accounts customers. The tractor up gradation SANJEEVANI is made available after an independent appraisal. A separate term loan has to be opened with same CIF number. 4. The product code allotted is 6230-1102

TRACTOR UPGRADATION (SANJEEVANI) FINANCE FOR REPAIRS, MAINTENANCE AND ADDITION OF NEW IMPLEMENTS ETC. TO TRACTORS Objectives: To assist the farmers, who are regular in their repayments for repairs / maintenance of tractor and for purchase of additional implements Borrowers 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. Facility: Agricultural Term Loan. Quantum of Loan: Repairs: Up to a 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

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Margin: Up to Rs.50,000 Above Rs.50,000 -

NIL 15-25% of invoice price

Application & Interview cum Appraisal form: Initially the borrower submits estimates/quotation obtained from reputed service centre/dealer/agent (who are authorized by tractor manufacturers) towards the cost of repairs to be undertaken and/ implements to be purchased (implements like blade harrows, MB plough, transplanters etc.,). Application as prescribed for Agriculture Term Loan, with modifications in Annexure for tractor / farm mechanization to be obtained duly assessing the reasonableness of the estimates/quotation and arriving at the quantum of the loan. Disbursement: After sanction of the loan by the appropriate authority, work order will be placed by the borrower with the service provider, to attend to the repairs. An undertaking is obtained from the borrower that repairs / service are undertaken by the service provider to his/their satisfaction. Branches after recovering the borrowers margin, will pay the entire amount of estimate for repairs and / or invoice amount towards the cost of additional implements to be purchased directly by way of DD / BC / credit to the account of the service provider/authorized dealer/agent. A cash receipt is to be obtained from the service provider / dealer / agent. In case advance amount, if any, is paid by the borrower to the service provider/dealer/agent with a proper receipt furnished, the same may be treated as margin of the borrower. Security: A. For borrowers who had already repaid / closed the Tractor loans: Upto Rs. 50,000/Primary - Hypothecation of tractor (value to be assessed based on the age and condition of the vehicle) and new implements. (Noting of Banks Charge with Road Transport Authority on tractor is a must) Collateral NIL Above Rs. 50,000/Primary - Hypothecation of tractor (value to be assessed based on the age and condition of the vehicle) and new implements. (Noting of Banks Charge with Road Transport Authority on tractor) Collateral Mortgage / Charge over the Land In case of genuine difficulties in the creation of mortgage / charge over the land, branches can obtain third party guarantee or such other security considered as appropriate for the loan , after obtaining permission for waiver of mortgage / charge on land from the controlling authority B. For borrowers having existing Tractor Loan A/cs.:

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Primary - Hypothecation of existing tractor / new implements Collateral Extension of Mortgage / Charge over the Land In case of genuine difficulties in the creation of mortgage / charge over the land, branches can obtain third party guarantee or such other security considered as appropriate for the loan , after obtaining permission for waiver of mortgage / charge on land from the controlling authority Documents: Hypothecation Agreement: AB 1 Deed of Guarantee - AB 2 (for third party guarantee) Mortgage Deed - AB3/ AB3A (for mortgage / extension of mortgage) / Declaration for charge on land. Arrangement Letter. Accounting procedure: For borrowers having existing Tractor loan account another account is to be opened with same CIF number. Interest Rate: Interest is linked to SBAR and rates applicable to Agricultural Term Loans from time to time, on aggregate limits for the facility and periodicity of interest application to coincide with the repayment due date. Financial Viability: DSCR: 1.75 (DSCR to be calculated including existing loan liabilities.) Gestation Period: No gestation period should be allowed and commencement of repayments to synchronize with next cash cycle. Repayment: Repayment period 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 instalment of the existing tractor loan, whichever are earlier, (tractors older than 9 years should not be considered). Periodicity of instalments is half yearly/yearly coinciding with the income generation. Insurance: Depending upon the willingness of the borrower(s), comprehensive or Third Party Insurance for the tractor has to be obtained. In case of third party insurance a consent letter for waiver of comprehensive insurance has to be obtained from the borrower(s). Asset Classification Norms: Same as applicable to Agri Term Loan. Inspection Follow up:

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As per extant guidelines (Refer e-Circular No. NBG / ABU/BP-MASTER CIR / 01 / 2009-10 dated 06.04.2009). Upfront Fees & Inspection Charges: Upfront fees: Up to Rs. 2 lacs - - Nil. Inspection Charges: Up to Rs.25,000/- - Nil Over Rs 25,000/-& up to Rs. 2 lacs - Rs.500/- p.a. (Subject to revision of service charges from time to time)

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MULTIPLE CHOICE QUESTIONS

1) An agriculturist enjoying ACC limit of Rs. 50000/= now approaches for an ATL of Rs. 50000/- for purchase of motor . The collateral security to be obtained is a) hypothecation of electric motor c) both a & b above 2) coconut etc. a) true 3)
4)

b) mortagage of landed property d) none of the above

Crop loan can be sanctioned to perennial crops like tea . coffee, mango, & b) false b) for one year c) for 18 months d) for 3 years

KCC limit is valid a) for ever

CC holders up to the age of PERSONAL insurance scheme -------------------- years are covered under

a) 50 5) Rs. ---- in case

b)65

c) 70

d) no age limit

Personal ACCIDENT insurance scheme for KCC holders covers risk up to of death due to accident or permanent total disability , i.s B) 50000/= C) 25000/= D) BOTH B & C ( loss of 2 eyes /2 limbs / 1 eye & 1 limb) a) RS/ 100000/=

6)

Amount of annual premium to be paid to designated insurance co. under personal accident insurance scheme is ----a) 1% of KCC LIMIT PER kcc holder b) 2% of KCC limit per KCC holder c) Rs.15/= per KCC HOLDER d) none of the above

7)

Under personal accident insurance scheme , the amount of premium is borne by a) kcc holder b) bank

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c) shared by bank & borrower in the ratio of 2:1 8) 9)

d) none of the above

The credit limit of borrower under KCC scheme is required to be reviewed a) every year b) after two yrs a) 10% of peak credit limit , max c) after 3 years Rs. 5000/= d) not reviewed THE farmer borrower can avail contingent credit needs under KCC up to b) 15% of peak credit limit , max. Rs. 10000/= c) 20% of peak credit limit Rs 10000/= d) 20% of total production credit limit

10)

Min & Max. loan to be sanctioned under KCC ARE a) Rs. 3000/= & Rs. 10.00 lacs c) Rs, 3000 & no limit b) Rs. 5000/= & Rs. 1.00 crore d) none of the above b) half yearly

11)

Repayment of CROP LOAN /KCC SHOULD BE ------------a) quarterly d) none of the above c) linked with harvesting & marketing of the crop

12)

Cheque book can be provided to a) a literate kcc borrower b) a above c) a literate kcc borrower with sanction limit of Rs. 1 lac & above d) any borrower availing kcc literate KCC borrower with sanction limit of Rs. 25000/= &

13)

ATM card can be provided to a) a literate KCC BORROWER b) a litteratr KCC borrower with sanction limit of Rs. 25000/= & above c) a literate KCC borrower with sanction limit of Rs. 1 lac & above d) any borrower availing KCC.

14)

AB-1 DOCUMENT is meant for a) hypothecation b) mortagage

262

c) notice to borrower for repayment of loan . 15) AB -3 DOCUMENT a) guarantee agreement c) mortagage deed ANS= 1=d 6=c 11=c 2=a 7=c 12=b 3=d 8=a 13=d 4=c 9=d 14=a is meant for

d) not pertaining to agri.

b) hypothecation agreement d) None of the above

5=b 10=c 15=c

263

MULTIPLE CHOICE QUESTIONS 2

1. Advance to Agriculture Segment should be minimum .. % of the net Bank credit a. 25.00% b. 15.00% c. 12.00% d. 18.00% 2. Kisan Credit Card can be issued to a) Owner cultivators, tenant cultivators and share croppers. b) Agricultural borrowers having good repayment record for past two Years. c) Credit worthy new farmers d) 3. All the above KCC limit comprises finance for a) Crop production expenses b) Working capital requirement for allied agricultural activities c) Expenses related to ancillary activities.& Consumption credit. d) All the above 4. Kisan Credit Card limit is valid for a. 1 year c .2 years 5. subject to a maximum of Rs. a. 10,000/6. a) Rs. 10 Lacs b. 15,000/b) c. 25,000/d. No ceiling. Maximum limit permissible under KCC is Rs. 20 Lacs b. 18 months d .3 years

Consumption component in KCC is 20% of the peak production credit,

264

c) Rs. 25 Lacs

d)

No specific ceiling

7.

Collateral security is obtained for KCC above

a) Rs.25000 c) Rs.75000

b) Rs.50000

d) Collateral security necessary for any amount 8. Crop insurance is compulsory for a) All loanee farmers c) Both a & b 9. a. Lead bank c. RBI 10. progressive farmers. a. True 11. b .False Which of the following statements is true? a. AB-1 is Mortgage Deed, AB-2 is Guarantee Agreement & AB-3 is Hypothecation Agreement b. AB-1 is Hypothecation Agreement, AB-2 is Mortgage Deed & AB-3 is Guarantee Agreement c. AB-1 is Guarantee Agreement, AB-2 is Hypothecation Agreement & AB-3 is Mortgage deed d. AB-1 is Hypothecation Agreement, AB-2 is Guarantee Agreement & AB-3 is Mortgage deed 12. 13. Standing crops are taken as a) Pledge b) Mortgage c) Hypothecation b) SSI Loan d.) Assignment Advances granted for lift irrigation is: a) Direct Agricultural Loan b) All non-loanee farmers d) Optional for both a & b b.NABARD d.Govt .of India ,Ministry of Finance

Potential Linked plan (PLP) is prepared by......................

We can finance more than the Scale of Finance stipulated by DLTC to our

265

c) Indirect agricultural loan,

d) Non-priority Loan

14.

Maximum loan that can be granted under Produce Marketing Loan is a. Rs. 1.00 lacs c. Rs. 10.00 lacs b. Rs. 5.00 lacs d. No ceiling

15.

National Agriculture Insurance Scheme covers....................... a) Crops of both borrowers and non-borrowers b) Food and Cash crops are covered c) There is no ceiling on the amount of insurance d) all of these

16.

Concept of Self Help Groups originated from a. Sri Lanka c. Bangladesh b. Pakistan d. Indonesia b)Rs.25,000/b. 00 20 c)Rs. 10,000/d)Rs.5,000/-

17. 18. 19.

Maximum claim received under KCC for accidental death is a)Rs.50,000/a. 10 20 Minimum and maximum no. of members stipulated in a SHG is c. 20 25 d. None of the these An SHG can be financed/credit linked a. 6 months after opening the Savings Bank account b. 3 months after formation of the group c. 12 months after formation of the group d. 6 months after formation of the group

20. 21.

Nodal agency for implementation of concept of SHG in India is a. RBI b. NABARD c. Regional rural Banks d. Central Government Maximum gestation and repayment period that can be permitted for Tractor Loans will be ______months and ________years respectively. a. 6 , 9 b. 12, 9 c. 6, 7 d. 12, 7

22.

Crop loan to one of the joint owners of land a) can not be granted

266

b) Can be granted c) Can be granted up to Rs. 10,000/23. Maximum loan which can be granted under Land Purchase scheme is a. Rs. c. Rs. 24. 1.00 lacs. 5.00 lacs. b.Rs. 2.00 lacs. d. No ceiling. b. Rs. 7.00 lacs. d. Rs. 10.00 lacs. b. Rs. 4.00 lacs. d. Rs. 10.00 lacs.

Maximum loan which can be granted under Broiler Plus scheme is a. Rs. 5.00 lacs. c. Rs. 9.00 lacs.

25.

Maximum loan which can be granted under Dairy Plus scheme is a. Rs. 2.00 lacs. c. Rs. 5.00 lacs.

26.

Maximum loan amount which can be granted to an individual under Agri Business and Agri- Clinic Centre schemes is a. Rs. 5 lacs c. Rs. 25 lacs b. Rs. 10 lacs d. Rs. 15 lacs b. Rs. 15.00 lacs. d. No ceiling b Mortgage c. Pledge d. Assignment

27.

Maximum loan which can be granted under Kisan Gold Card scheme is a. c. Rs. Rs. 10.00 lacs. 5.00 lacs.

28. 29.

Charge on the land is created by means of-------a Hypothecation A farmers, who is already enjoying a KCC limit of Rs. 40,000/- applies for a New Term Loan limit of Rs. 30,000/- for purchase of irrigation pump set. The Security required for the pump set loan will be only primary security i.e. Hypothecation of the pump set a. Primary security + Mortgage of land b. Only mortgage of land. c. No security is required

30. Registered Office of State Bank of India is situated at-----------

267

a.Mumbai

b.Kolkata

c Hyderabad

d. Chennai

31.

DSCR stands for a. Debt Scoring and Credit Rating b. Demand Service and Credit Rating c. Debt Service and Credit Rating d. Debt Service Coverage Ratio

32.

DSCR indicates ___________________ capacity. a. Earning capacity of the project b. Repayment capacity of the borrower c. Profitability of the unit d. None of the above

33.

Formula for working out Gross DSCR is a. b. c. d. Net Income + Depreciation Interest on Term Loan + Depreciation Term Loan Installment + interest on TL Net Profit + Non Cash Expenses [Depreciation] Cash accruals + Depreciation . Term Loan Installment + interest on Term Loan Cash Accruals + interest on Term Loan Term Loan installment + interest on Term loan . .

34. 35.

Minimum DSCR for financing tractor loan under Tractor Plus Scheme is A.2.00 b.1.75 c 2.5 d.1.5 b. Internal Rate of Recovery d. Internal Ratio of Recovery Expand IRR a. Internal Rate of Return c. Internal Ratio of Return

36.

For a project to be considered as Economically Viable, the IRR should

268

be more than _______ %. a. 15 c. 20 37. b. 25 d. 10

All the crop loans should be repaid on due date. The due date is crop period plus a) 15 days for marketing c) 1 month for marketing b) 4 months for marketing d) 2 months for marketing

38.

Which of the following is treated as direct finance to agriculture? a) b) c) Loans to farmers given against IVP/TDR/KVP Advances to Floriculture/Horticulture All of these by _______________. b.Lead Bank c.NABARD d.RBI

40.

For the purpose of IRAC norms, the duration of each of the crops is decided a.SLBC

41.

A crop having crop duration of 12 months is a a. Long duration crop c. Both short & long duration crop b. Short duration crop d. None of the above

42.

Loans granted for Agriculture activities would become NPA, if remain unpaid for ---- from the due date. a. Two crop seasons for short duration crops. b. One crop season for long duration crops. c. Both a & b. d. Loans granted for Agriculture activities will never become NPA

43.

Loans granted for Allied Agricultural activities such as Dairy, Poultry, etc. become NPA if the account is overdue for a. one crop season c. more than 90 days b. two crop seasons d. two harvesting seasons not exceeding 1 year.

269

44.

An NPA will be classified as a doubtful asset if it has remained as a substandard asset for a. 12 months c. 6 months b. 18 months d. 24 months b. Agri Business Unit d. Agriculture Banking Union

45.

ABU stands for a. Advances & Business Union c. Agriculture Advances Business Unit

46.

There are Circles in the Bank a. 11 c. 13 b. 12 d. 14

47.

Thrust areas identified by the bank are a. Poultry, Dairy, Aquaculture, Horticulture, Minor Irrigation, Cotton Cultivation, Finance against warehouse receipts & Tractor Finance b. Dairy, Sugarcane cultivation, Horticulture, Cotton cultivation, Finance against warehouse receipts & Seed Processing c. Dairy, Sugarcane cultivation, Horticulture, Cotton cultivation, Tractor Financing, Finance against warehouse receipts & Seed Processing d. Poultry, Sugarcane cultivation, Horticulture, Cotton cultivation, Finance Against warehouse receipts & Tractor Financing

48.

Highest contribution to our GDP comes from a. Services sector c. Agricultural sector b. Industry sector d. I.T sector

49.

Service Area restrictions are a. Applicable for all priority sector advances. b. Applicable for only agriculture loans. c. Applicable only for Government sponsored schemes. d. All the restrictions have since been withdrawn.

270

50.

Which of the following is true in respect of Dairy Plus Scheme? a) Farmers must be residing in a village located on milk route. b) Applicant shall be below 65 years of age c) Should own minimum 0.25 acre of land for every 5 animals owned for cultivation of fodder d) All of these

ANSWER SHEET Name: SL. NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 ANSWER D D D D D D B A B A D C A C D C A A MARKS SL. NO. 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 ANSWER B A B A B D B D B A A D C * A B C C MARKS

271

19 20 21 22 23 24 25

D B B B C C C TOTAL

44 45 46 47 48 49 50

A B D B A C D TOTAL

272

MULTIPLE CHOICE QUESTIONS 3

1. 2. D.C.B. register is maintained for............ advances. a) ACC b) ATL c) Both d) None of these While fixing limit under the Kisan Credit Card scheme, the production credit requirement of the farmer for ______ should be taken into account a) The full year c) Two agriculture seasons 3. a. Registration, insurance or one time road tax b. Registration or insurance and one time road tax c. Registration and insurance d. Registration, insurance and one time road tax 4. Crop loans are given to a) Share croppers c) Marginal & Small farmers 5. 6. 7. a) RBI b) NABARD b) Large farmers d) All of these d) DLTC b) One agriculture season d) None of them

Cost of vehicle in case of car loan includes---------

Potential Linked Plan (PLP) is prepared by...................... c) Govt of India Charge created on standing crops as----a) Pledge b) Mortgage c) Hypothecation d) Assigned Limitation for registered mortgage is............... years from the date the mortgage amount becomes due. A) 5 b) 7 b) ATL c) 12 d) 15 d) Demand Loans c) Both d) Only front- ended

8. 9.

The facility of KCC will be subject to prudential norms as applicable to A) ACC c) Overdraft Under SGSY Scheme, the subsidy will be -------A) Front- ended b) Back- ended

273

10.

Consumption component in KCC is 20% of the peak production credit, subject to a maximum of Rs. a. 10,000/b. 15,000/ c. 25,000/d. No ceiling.

11.

We can finance more than the Scale of Finance stipulated by DLTC to our progressive farmers. a. True b.False b. 80% b.10 b.100000 b.50 c. 15 c. 150000 c. 90% d. 20 d. No Limit c .75 d .100 d. 100%

12. 13. 14. 15. 16.

NABARD refinance to SHG borrowers is to the extent of a. 50% a. 5 a. 5500 a. 0 Maximum advance under SBI Kisan Gold Card scheme is Rs ------lacs Maximum advance under KCC is Rs._________ Risk weightage for advances against NSCs/STDRs is--------% DSCR indicates ___________________ capacity. a. Earning capacity of the project b. Repayment capacity of the borrower c. Profitability of the unit d. None of the above

17.

While financing self help groups, the group should be in active existence for at least______ a) 1 months b) 6 months c) 1 Year d) 15 months

18.

Advance made against the LIC Policy is linked to-----A .Face value c. Paid up value b.Paid up value+Bonus paid. d.None of these b) Regional office

19.

The scale of finance for crop loans are fixed by _______ a) Local Head office

274

c) Lead Bank 20.

d) District Level Technical Committee

In case of KCC ------%of the total production limit may be granted for contingent needs as consumption limit. a) 10 b) 15 c) 20 d)25

21.

An asset will be treated as doubtful, if it has remained in sub-standard category a) 6 months c) 18 months b) 12 months d) none of these

22.

Current Ratio means----a) Current Assets minus Current Liability b) Current Assets / Current Liability c) Current Liability/ Current Assets d) Current Liability minus Current Assets

23.

An account is to be categorized as SMA if :a) Accounts where interest/ installment has not been serviced for 30 days b) Accounts which are not is default but are showing early warning signals c) Both a and b d) None of the above

24. 25. 26.

SBI Educational loan is granted as--------a. CC a) Bajra b. OD b) Wheat c. Term Loan c) Paddy b) Floating Charge d) Proportionate Charge is not having PAN No. he is required to d) Millet. d. CTL One of the following crops is a major kharif crop What is Paripassu Charge? a) Second Charge c) a & b

27.

If

Customer

furnish___________forms a) Form 16-A b) Form COS - 49

275

c) Form 60 or 61 28.

d) Form 22

What is the sequence of interest realization in NPA accounts? a) URI, INCA, subsequent Interest b)INCA, URI, subsequent interest c) Subsequent interest, INCA, URI d) Interest booking not permitted

29. 30.

Paid up Capital is------a) Tier I Capital b) Tier II Capital c) Tier III Capital d) None Service Area restrictions are a. Applicable for all priority sector advances. b. Applicable for only agriculture loans. c. Applicable only for Government sponsored schemes. d. All the restrictions have since been withdrawn. Answer Sheet A 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 X X X X X X X X X X X X X X B X C D 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 A B X X X X X X X X X X X X X X X C D

MULTIPLE CHOICE QUESTIONS 4

1. Crop loans are sanctioned for (a) Owners only (c) Tenants only (b) share croppers only (d) either A, B or C

276

2.

Revival letter AB4 & AB5 have to be affixed with stamps for __________ (a) Re.1.00 revenue stamp (c) Re.1.00 non-judicial adhesive stamp (b) 25 paise revenue stamp (d) None of the above

3.

For conversion of crop loan into term loan a request from the farmer borrower has to be made in (a) AB 6 (b) AB 3 (c) AB 7 (d) none of the above

4.

RBI AGL V is a return meant __________ (a) To know the amount of loan disbursed (b) To know the total outstanding (c) To know the recovery half-yearly (d) To know the recovery level annually

5.

SGSY has to be implemented ___________ (a) In all places irrespective of population (b) In rural and semi-urban areas only (c) In rural areas only (d) None of these

6.

Government subsidy available for DIR scheme is ____________ (a) 25% (b) 20% (c) 12% (d) None of these

7.

Spacing norms are waived for financing minor irrigation schemes in (a) Dark area (b) Gray area

(c) White area (d) none of these

8.

What is the maximum repayment period permissible for Tractor loan? (a) 7 yrs. (b) 8 yrs. (c) 9 yrs. (d) 3 yrs.

9.

Limitation period for the Hypothecation Agreement AB1 in case of agricultural term loans

277

(a) 3 years from the date of revival (b) 3 years from the date of demand (c) 3 years from the due date of repayment (d) 3 years from the due date of repayment / first overdue installment or from the date of demand whichever is earlier 10. A Tractor is considered to have a minimum work of _______________ besides custom hiring service, per annum. (a) 600 hours of work (b) 5000 hours of work (c) 7000 hours of work (d) 1000 hours of work 11. At least ______% of the total amount required for repayment of installment of tractor loan together with interest should come from the incremental income derived out of mechanization of beneficiaries farm (a) 25% (b) 40% (c) 50% (d) No such restrictions 13.Daily transactions regarding the implementation of Annual Credit Action Plan is reported to Lead Bank in (a) LBR 1 (b) LBR 2 (c) LBR 3 (d) IRDP 1 14.Inspection charges will be waived, for Agriculture for (a) All SGSY and DIR advance (b) SGSY and DIR advances upto Rs.5,000/(c) All SGSY DIR advances and other advances upto Rs.25,000/15.Kharif season starts from (a) April to September (b) January to June (c) July to December (d) October to March 16.Rabi season starts from (a) December to May (b) October to March (c) May to October (d) July to December 17. What is the maximum loan limit under Land Purchase Scheme?

278

(a) Rs.2.00 lacs (b) Rs.3.00 lacs (Excluding developmental charges) (c) Rs.5.00 lacs (Excluding developmental charges) (d) Rs.4.00 lacs (including developmental charges) 18.To boost agro-processed food exports, Government of India has promoted (a) MPEDA (b) APEDA (c) APFEDA (d) DPAPDA 19. Under the scheme for financing purchase of tractors below 18 HP, the repayment period fixed is (a) 9 years (b) 10 years (c) 12 years (d) 7 years 20. Term loan for the purchase of movable assets can be sanctioned without insisting for collateral security upto (a) Rs.25000/- (b) Rs.10000/(c) Rs.20000/- (d) Rs.50000/21. Running cash credit facility for crop cultivation is considered as part of ____________ account only for accounting purposes (a) Agri Term Loan (b) Demand Loan (c) Part of Cash Credit (d) ACC 22. Total interest debited should not exceed the principle amount in case of short term loans sanctioned to (a) High-tech Agri borrowers (b) SF/MF (c) DRI borrowers (d) None of the above

23. Irrigation projects with cultivable command area upto _____ hectares are classified under minor irrigation scheme (a) 1000 (b) 5000 (c) 2000 (d) 10,000 24. __________________ is not an organic manure

279

(a) Oil cake (b) Farm yard manure (c) Bone meal (d) Potash 25. What is maximum limit that can be granted under Produce marketing loan? (a) Rs.5.00 lacs (b) Rs.3.00 lacs (c) Rs.2.00 lacs (d) Rs.10.00 lacs or 60%-80% of value of produce 26. Agricultural Term Loans are granted for: (a) Purchase of seeds, manures and fertilizers (b) Purchase of pesticides (c) Purchase of durable assets (d) All of these 27. Lactation period in respect of milch animals refers to (a) The period during which the animal gives milk (b) The period between the date of conception and date of giving birth to young one (c) Inter-calving period (Time gap between the two dates of giving birth to young ones) (d) The age at which the animal starts giving milk 28. Gestation period refers to: (a) Repayment period of a term loan (b) Period between disbursement of loan and closure of loan (c) Moratorium period of no-repayment (d) Time taken for sanction of loan

29. The purpose of Inspection in Agriculture is (a) Service area oriented (b) Farm oriented (c) Village oriented (d) Farmer oriented

280

30. One of the functions given here is not performed by Lead Bank (a) To survey credit needs (b) Develop Branch Banking (c) Provide infrastructure to all Bank Branches (d) Enable extension of credit facilities 31. When an EM is created it is valid for a period of (a) 12 years (b) 13 years (c) 30 years (d) 6 years 32. As per government directives, the share of weaker section in Banks advance should be (a) 12% of total advance (b) 1% of total advance (c) 20% of priority sector advances (d) 10% of total advances 33. Agricultural labourer is one (a) Who owns less than 0.5 acres, earns 50% of income from Agriculture. (b) Who is landless and work in farms owned by others. (c) Who earns 55% of income through farm labour. (d) Who is not an industrial worker. 34. ________________ is the committee which recommended simplification of loan application forms and documents for agricultural finance (a) Krishnaswamy Committee (b) Ghosh Committee (c) R.V. Gupta Committee (d) Oza Committee

35. To avail of Kisan Credit Card, minimum production credit limit requirement should not be less than (a) Rs.3000/- (b) Rs.10000/(c) Rs.20000/- (d) Rs.100000/36. Under Agricultural Segment, the collateral security / third party guarantee is waived upto a limit of ____________ in respect of crop loans

281

(a) Rs.10000/- (b) Rs.15000/(c) Rs.50000/- (d) Rs.25000/37. Advantage of Kisan Credit Card over Agricultural Cash Credit is (a) Cheaper interest rate (b) Permits any number of drawals / repayment within the limit (c) Provides for contingent needs to a limited extent (d) b and c above 38. Loan under Kisan Credit Card (KCC) will be accounted for under (a) Agricultural Cash Credit (b) SBI Credit Card account (c) Demand Loan (d) Agri. Term Loan 39. Maximum loan under DIR scheme is __________ for general purposes is (a) Rs.1500/- (b) Rs.5000/(c) Rs.15000/- (d) Rs.10000/(e) None of these 40. Loans granted for consumption needs of farmers, the branch may charge interest at (a) 10% (b) Same rate as stipulated under Short Term Loan (c) 4% (d) 12.5% 41. What is the maximum amount of loan that can be sanctioned without mortgage / charge over the assets under A.T.L. where in no movable assets are created? (a) Rs.1000/- (b) Rs.2000/(c) Rs.5000/- (d) Rs.10000/42. The mandatory percentage of Agricultural advances to Total Advances is _______ (a) 15% (b) 18% (c) 47% (d) 50%

282

43. Amount of loan permitted to meet contingent need of the farmer under Kisan Credit Card is (a) 20% of the peak level credit limit sanctioned for production purposes (b) No provision for contingent need (c) 15% of the peak credit limit sanctioned for production purposes without any ceiling (d) 10% of the peak credit limit sanctioned for production purposes 44. Field Officers can now sanction loans upto (a) Rs.2.00 lacs (b) Rs.1.00 lac (c) Corresponding to the powers of BMs of same grade. (d) No power

45. The limit of crop loan to individual sugarcane grower that can be sanctioned without collateral security under tie-up arrangement with the sugar mill is (a) Rs.15000/- (b) Rs.45000/(c) Rs.200000/- (d) Rs.25000/46. Under agricultural segment no due certificates need not be insisted upon in case of new loans upto (a) Rs.10,000 (b) Rs.50,000 (c) Rs.45,000 (d) None of the above 47. Amount of produce marketing loan against pledge / hypothecation under priority sector may be granted: (a) Upto Rs.10,000/- to any agriculturist for three months (b) Upto Rs.5 lacs to crop loan borrowers for three months (c) Upto Rs.1 lac to crop loan borrowers for six months (d) Upto Rs.10 lac to crop loan borrowers for twelve months 48. Advances upto Rs.25 lacs for distribution of inputs to allied agricultural activities is extended as: (a) Direct agricultural advances under priority sector (b) Indirect agricultural advances under priority sector (c) Indirect advances under C&I sector (d) Indirect advances under SIB sector

283

49. KCC facility for agriculture should be reviewed at (a) After 3 years (b) Annually (c) Half yearly (d) Quarterly 50. Under group life insurance scheme for SHG, the cover available to the nominee incase of accidental death is (a) Rs.6000/- (b) Rs.25000/(c) Rs.5000/- (d) Rs.12000/51. What is the maximum amount of risk covered in Personal Accident Insurance Scheme for KCC holders? (a) Rs.50000/- (b) Rs.1.00 lac (c) Rs.25000/- (d) Rs.75000/52. Loans to small and marginal farmers for purchase of shares of agro-based units are to be treated as (a) Direct agricultural finance (b) Indirect finance to agriculture (c) P segment finance (d) SIB segment 53. Branches need not insist for collateral security for loans to self help groups (SHG) without Government assistance. (a) Limits upto Rs.500000/- per group (b) Limits upto Rs.25000/- per group (c) Limits upto Rs.50000/- per group (d) Limits upto Rs.10000/- per group

54. In case of natural calamity while restructuring the crop loan to term loan (a) Principal outstanding will be converted (b) Principal and interest will be converted (c) only interest portion will be converted (d) none of the above 55. Loans disbursed to SHGs are to be reported under

284

(a) Agricultural segment (b) Small business segment (c) personal segment (d) SIB segment 56. For the purpose of arriving at loan to savings ratio under SHG, savings means (a) Balance in the savings bank account maintained by the group (b) Balance in the savings bank account, cash on hand and loan amount outstanding with the group members (c) Amount deposited in fixed deposit account as security to the proposed loan (d) Balance in savings bank account and cash on hand 57. Subsidy available to individual beneficiary under SGSY is (a) 25% of the loan amount subject to a maximum of Rs.6000 (b) 30% of the Project Cost subject to a maximum of Rs.7500 for individuals & 50% of the Project Cost subject to a maximum of Rs.10000 for SC/ST. (c) 50% of the loan amount subject to a maximum of Rs.7500 (d) 50% of the loan amount subject to a maximum of Rs.10000 58. While financing SELF HELP GROUPS, the group should be in active existence for at least (a) 1 month (b) 6 months (c) 1 year (d) 5 months

59. Finance extended (ceiling upto Rs. 20 lacs) to dealers in drip irrigation is considered as (a) SBF advance (b) Indirect agri advance (c) Direct agri advance (d) None of the above 60. NABARD Unit cost as stipulated for various kinds of activities financed by commercial banks (a) cannot be violated

285

(b) 10% increase can be made (c) It is only indicative and hence may be violated (d) None of the above 61. Subsidy available to a group (SHG) under SGSY is (a) 25% of the cost of the project subject to a ceiling of Rs.1 lac (b) 50% of the cost of the scheme subject to a ceiling of Rs.1.25 lac (c) 33 1/3% of the cost of the scheme subject to a ceiling of Rs.1.50 lac (c) 33 1/3% of the cost of the scheme subject to a ceiling of Rs.1.25 lac 62. Under SGSY, focus on the vulnerable groups among the rural poor is (a) 50% SC/ST, 40% women and 3% disabled swarozgaris (b) 33 1/3% SC/ST and 33 1/3% women (c) 25% SC/ST and 50% women (d) none of the above 63. All loans sanctioned under SGSY should have minimum repayment period of (a) 36 months (b) 48 months (c) 60 months (d) 84 months 64. What is the limit upto which collateral security is waived for Dairy Plus Scheme a. Rs.25000 c. Rs.1.00 lac b. Rs.50000 d. Any limit

65. The security norms for financing diversifying crops under CONTRACT FARMING is a. Hypothecation of crops and collateral security. b. Hypothecation of crops and waiver of collateral security for limits up to Rs.1 lac. c. Only group guarantee. d. None of the above. 66. Loans / Overdrafts given to farmers against FD/KVP etc. should be classified as .

286

a. Direct finance to Agriculture. b. Indirect finance to Agriculture. c. Finance to Allied Agricultural activities. d. None of the above. 67. Development loans to all plantations, horticulture, forestry and wasteland have to be classified as . a. Direct finance to Agriculture. b. Indirect finance to Agriculture. c. Finance to Allied Agricultural activities. d. None of the above. 68. All in All out System is connected with a. Fisheries (b) Dairy (c) Poultry (d) Horticulture 69. What is the minimum Flock size under Broiler Plus Scheme? (a) 3000 Birds (b) 4000 Birds (c) 5000 Birds (d) 10000 Birds 70. Vermiculture refers to a. Growing of birds (b) bee keeping (c) rearing of earth worms(d) mushroom cultivation 72. Housing loan Scheme available for SHGs is known as (a) Gram Niwas (b) Sahyog Niwas (c) Golden Jubilee Special RHS (d) None of the above 73. Minimum number of members in a SHG should be (a) 10 (b) 15 (c) 20 (d) 25 74. Who can promote SHGs? (a) NGO (b) SHPI (c) Banker (d) All the above

287

75. What is the validity period of Kisan Gold Card? (a) 1 year (b) 2 years (c) 3 years (d) 5 years 76. The following expenses may be considered under Land Purchase Scheme. (a) Cost of land (b) Registration charges/Stamp duty (c) Purchase of farm equipments (d) All the above 77. Collateral security is waived for setting up of Agri. clinic/Agri. Business Centres is waived upto (a) Rs.1.00 lac (b) Rs.2.00 lacs (c) Rs.3.00 lacs (d) Rs.5.00 lacs (a) Agri. Seg. (b) SIB (c) C&I (d) All the above depending upon the loan limit 79 The scheme Cyber plus refers to (a) Setting up Super Markets 78. Loans granted to Commission agents under Arthias Plus Scheme is classified under (a) Setting up Chain Stores (b) Setting up Internet Centres in Rural/Semi-Urban areas (c) All the above 80. Green channel programme for excellence refers to
(a) Issuing maximum number of KCC (b) Issuing maximum number of KGC

(c) Award for best agriculturist in a branch (d) None of the above 81. The advantage of contract farming (a) Quality inputs (c) Buy back arrangement (b) Technical guidance (d) All the above

82. While financing of second hand tractor, one of the following need not be obtained: a. hypothecation termination letter b. supplementary hypothecation letter c. AB1 d. arrangement letter 83. Mixed farming means

288

a. multiple cropping b. availing of crop loan and gold loan c. undertaking cultivation and allied activities d. none of these KEY TO AGRICULTURE I Q.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Ans D D C D C B D C D A C * B C A B C A C D Q.N Ans o. . 21 D 22 B 23 C 24 D 25 D 26 C 27 A 28 C 29 D 30 C 31 A 32 D 33 A 34 C 35 A 36 C 37 D 38 A 39 C 40 B 81 82 83 Q.N Ans Q.N Ans o. o. 41 A 61 B 42 B 62 A 43 A 63 C 44 C 64 C 45 C 65 B 46 D 66 A 47 D 67 A 48 B 68 C 49 B 69 C 50 B 70 C 51 A 71 * 52 B 72 B 53 A 73 A 54 B 74 D 55 A 75 A 56 B 76 D 57 B 77 D 58 B 78 D 59 C 79 C 60 C 80 D D A C

MULTIPLE CHOICE QUESTIONS 5

1. Agriculture sector contributes .. % in Indias GDP. A. 24% C. 19% B. 33% D. None of the above

289

2.

RBI guidelines stipulate a maximum of ..% indirect agriculture advance out of 18% net bank earmarked of Agriculture segment to be categorized under priority sector. A. 20% B. 25% C. 30% D. None of the above

3.

OMRs are posted at: A. LHO C. At one center for a cluster of branches B. Zonal office D. None of the above B. All segments

4.

MRT is required to do marketing for A. All Agri. Advances D. None of them. C. All Agri. Advances other than Govt. Sponsored Schemes

5.

What is the indicative Gross Debt Service Coverage Ratio prescribed by the Bank? A. 1.75:1 C. 1.5:1 B. 2:1 D. 2.25:1 B. Long Term Credit D. None of these B. Borrower and .Bank on 50:50 D. Borrower and .Bank on 25:75 B. Ancillary activities D. All the above

6.

NABARD provides refinance assistance to Commercial Banks for---A. Short Term Credit C. A & B

7.

In case of agricultural advances, cost of photographs is borne by ---A .Borrower C.Bank

8.

Purpose for which KCC can be granted----A. Crop Production C. Allied activities

9.

Progressive farmers can be financed production credit maximum to the tune of A. SOF recommended by DLTC/SLTC B. 150% of SOF fixed by DLTC/SLTC

290

C. 200% of SOF fixed by DLTC/SLTC 10. A. Rs.50000 C. Rs.200000 11. be a minimum of A. 1.5 C. 2 12. B. 1.75 D. Not required B. Rs.100000 D. Rs.500000

D. None of the above

Minimum credit limit under SHG Credit Card is

For availing finance for purchase of a combine harvester the DSCR should

What is the proposed settlement period under OLTAS A. T + 5 Working days C. T + 3 (inclusive of holidays and Sunday) D. T + 5 (inclusive of holidays and Sunday) B. T + 3 Working days

13.

What is the penalty interest the bank has to pay, if there is delay in settlement of the funds? A. Deposit rate + 0.5% C. Bank rate + 2% B. Deposit rate + 1% D. Bank rate + 1% B. No

14. 15.

Can a joint account be opened under PPF Scheme 1968? A. Yes SBI ? A. 18 C. 21 B. 20 D. 25 B. 60 months D. 72 months B. Rs. 15000 D. Rs. 25000 What is minimum age required for a customer to avail Housing Loan with

16.

What is the maximum repayment period for car loan? A. 84 months C. 48 months

17.

What is the minimum lone amount under Xpress Card? A. Rs. 10000 C. Rs. 20000

291

18.

What is the loan policy guideline of the Bank in respect of maturity of loans (inclusive of gestation period)? A. 9 years C. 7 years B. 8 years D. 5 years B. 1.25 D. 1.5

19.

What is the indicative branch mark of the Bank in respect of current ratio A. 1 C. 1.33

20.

To assess the financial soundness of the unit, what is the reasonable TOL/TNW prescribed by the bank? A. 4:1 C. 2:1 B. 3:1 D. 5:1

21.

What is the indicative Net Debt Service Coverage Ratio prescribed by the Bank? A. 1.75:1 C. 1.5:1 B. 2:1 D. 2.25:1 6 7 8 9 10 C C D C A 11 12 13 14 15 B B C A A 16 17 18 19 20 A A B C B 21 B

KEY TO Q 1 TO 21 1 2 3 4 5 C B C B A

MULTIPLE CHOICE QUESTIONS 6

1. The objectives of extending agri. gold loans are: a. To increase the liquidity to meet crop production expenses b. Investment expenses related to agriculture

292

c. Investment expenses related to allied activities d. Any other expenses related to agriculture e. All the above 02. Maximum amount of gold loan sanctioned under Agri: a. Rs.50000/b. Rs.300000/c. Rs.500000/d. Depends on the advance value of the Gold and the requirement of the farmer. 03. Maximum repayment period given under Agri Gold Loan: a. 12 months for short term loan b. 30 months for meeting investment expenses c. Either a or b d. None of the above 04. For availing Produce Marketing Loan the eligible customers are: a. All our existing borrowers good track record only b. All non-overdue borrowers also c. Crop loan borrowers of other Banks d. Non-Borrower Farmers e. All of them can be considered. 05. When the loan is sanctioned against Ware House Receipts Collateral is needed: a. When the loan amount exceeds Rs.50000/b. When the loan amount exceeds Rs.500000/c. When the loan amount exceeds Rs.1000000/d. None of the above 06. What is the margin to be brought in by the farmer under Kisan Credit Card? a. Up to Rs.50000/- Nil b. Above Rs.50000/- 15 to 25 %

293

c. Scale of finance applied No Margin d. None of the above 07. Under Kisan Credit Card, when the loan is sanctioned with tie up arrangements we need not obtain collateral security up to: a. Rs.50000/b. Rs.100000/c. Rs.200000/d. None of the above 08. What is the maximum loan amount sanctioned under Kisan Credit Card? a. Rs.50000/b. Rs.100000/c. Rs.200000/d. It depends on the cropping pattern, land holding and scale of finance. e. None of the above. 09. Maximum loan can be sanctioned under Kisan Gold Card Scheme: a. Rs.100000/b. Rs.1000000/c. Rs.1000000/- minus term loan outstanding if any d. 5 times of annual income or 50% of value of land to be mortgaged whichever is more e. Either [c] or [d] 10. The purpose for which the Kisan Gold Card scheme promoted: a. To take care investment needs of the farmer only b. To take care production needs of the farmer only c. To take care investments needs and also consumption needs of the farmer d. Either [a] or [b] e. None of the above 11. The consumption loan under KGC can be included: a. Education Expenses

294

b. Marriage Expenses c. Medical Expenses d. Local Function Expenses e. All the above 12. The loan considered for under Land Purchase Scheme: a. Cost of Land b. Provision of irrigation facilities and land development c. Purchase of farm equipments d. Registration charges and stamp duty e. All the above 13. Eligibility under Land Purchase Scheme: a. Small and Marginal Farmers only b. Tenant Cultivators only c. Share Croppers only d. Landless Agricultural Labourers only e. All of them 14. Maximum loan amount under Land Purchase Scheme: a. Rs.200000/b. Rs.50000/c. Rs.500000/d. Rs.500000/- [Excluding development changes] e. None of the above 15. Eligibility under Dairy Society Plus Scheme a. Milk Societies registered and affiliated to District Milk Union b. Supplying 1000 lit/day to Milk Units c. Earning pretax profits for the last two years d. Borrowing Powers as per bye-law s of the society e. All the above 16. Purpose for which the loan can be sanctioned under Dairy Society Plus:

295

a. Construction of Milk house or society office b. Purchase of Automatic Milk collection system c. Purchase of transport vehicles d. Purchase of Bulk chilling unit e. All the above 17. Maximum loan amount can be sanctioned under Dairy Society Plus: a. Maximum two times the average profit of previous 2 years b. Maximum four times the average profit of previous 2 years c. Maximum six times the average profit of previous 2 years d. Maximum four times the average profit of previous 2 years or Rs.1000000/e. None of the above 18. What are all the objectives of setting up of Agri-Clinic and Agri Business Centres a. To augment support and extension services for agriculture b. To provide a package of soil and input testing facilities and other consultancy services c. To strengthen transfer of technology and extension of services d. To provide self employment opportunities to technically trained persons e. All the above 19. Scheme for financing commission Agents Arthias Plus Scheme: Eligibility for classifying under agriculture segment: a. Commission agents holding a valid license from market yard b. Commission agents should be in the line of operation for the past 3 years c. Commission agents having receivables from farmers only d. Commission agents functioning in rural and semi urban markets/mandis e. All the above 20. Maximum amount of loan can be sanctioned under Arthias Plus Scheme a. Rs.1000000/- b. Rs.2000000/-

296

c. Rs.2500000/- d. Rs.5000000/e. None of the above 21. The objectives for financing Cold Storage: a. To promote setting up of cold storage and reducing post harvest losses b. To create cold chain infrastructure from farm to the consumer c. To modernize/rehabilitate cold storages d. All the above e. None of the above 22. Under Scheme for Financing Seed Processors, the maximum loan can be sanctioned: a. Rs.1000000/b. Rs.2000000/c. No limit d. Need based limit no upper ceiling but above Rs.200000/e. None of the above 23. Under the scheme for development and strengthening of Infrastructure facilities for production and distribution of seeds, the eligible organizations are: a. Private Companies b. Individual Entrepreneurs c. Self Help Groups d. Seed Co-operatives e. All the above 24. Minimum credit limit can be sanctioned under SHG Credit Card and SHG Gold Card: a. Rs.25000/- and Rs.50000/c. Rs.100000/- and Rs.200000/e. None of these b. Rs.50000/- and Rs.100000/d. Rs.50000/- and Rs.200000/-

297

25.

Under the scheme [capital investment subsidy scheme for commercial production units of organic inputs] manufacturing of organic inputs are: a. Biofertilisers Unit e. None of the above b. Vermiculture Hatcheries d. All the above. c. Fruit and Vegetable Waste Compost Unit

26.

Mortgage loan to Seed Processing Units Scheme the minimum and maximum loan can be sanctioned: a. Rs.500000/ and Rs.10000000/b. Rs.1000000/- and Rs.10000000/c. Rs.200000/- and Rs.10000000/- d. None of the above

27. The objectives of introducing financing of joint liability groups of Tenant Farmers: a. To augment flow of credit to tenant farmers, share croppers b. To extend collateral free loans to target clients through JLG scheme c. To build mutual trust and confidence between bank and tenant farmers. d. All the above e. None of the above KEY TO AGRICULTURE 1. e 16. e 2 d 17. d 3 c 18 e 4 e 19 e 5 c 20 c c 21. d 6 c 22 d 7 d 23 e 8 e 24 d 9 c 25 d 10. e 26 a 11 e 27 d 12 13 e d 14 e 15

MULTIPLE CHOICE QUESTIONS 7

1) An agriculturist enjoying ACC limit of Rs. 50000/= now approaches for an ATL of Rs. 50000/- for purchase of motor . The collateral security to be obtained is a) hypothecation of electric motor b) mortagage of landed property

298

c) both a & b above 2) coconut etc. a) true 3) KCC limit is valid a) for ever 4) b) for one year b) false

d) none of the above

ans= d

Crop loan can be sanctioned to perennial crops like tea . coffee, mango, & ans=a c) for 18 months d) for 3 years ans= d KCC holders up to the age of PERSONAL insurance scheme a) 50 b) 65 c) 70 d) no age limit ans=c -------------------- years are covered under

5)

Personal ACCIDENT insurance scheme for KCC holders covers risk up to Rs. ---- in case a) RS/ 100000/= of death due to accident or permanent total disability , i.s B) 50000/= C) 25000/= D) BOTH B & C ANS=B (loss of 2 eyes /2 limbs / 1 eye & 1 limb)

6)

Amount of annual premium to be paid to designated insurance co. under personal accident insurance scheme is ----a) 1% of KCC LIMIT PER kcc holder b) 2% of KCC limit per KCC holder c) Rs.15/= per KCC HOLDER d) none of the above ans= c

7)

Under personal accident insurance scheme , the amount of premium is borne by a) kcc holder d) none of the above b) bank ans=c c) after 3 years d) not reviewed ans=a c) shared by bank & borrower in the ratio of 2:1

8)

The credit limit of borrower under KCC scheme is required to be reviewed a) every year b) after two yrs

9)

The farmer borrower can avail contingent credit needs under KCC up to

299

a) 10% of peak credit limit , max c) 20% 10)

Rs. 5000/=

b) 15% of peak credit limit , max. Rs. 10000/= of peak credit limit Rs 10000/= ans=d d) 20% of total production credit limit Min & Max. loan to be sanctioned under KCC ARE a) Rs. 3000/= & Rs. 10.00 lacs c) Rs, 3000 & no limit 11) a) quaterly c) linked above 12) Cheque book can be provided to a) a literate kcc borrower b) a above c) a literate kcc borrower with sanction limit of Rs. 1 lac & above d) any borrower availing kcc 13) ATM card can be provided to a) a literate KCC BORROWER b) a litteratr KCC borrower with sanction limit of Rs. 25000/= & above c) a literate KCC borrower with sanction limit of Rs. 1 lac & above d) any borrower availing KCC. ANS= D ans=b literate KCC borrower with sanction limit of Rs. 25000/= & with harvesting b) Rs. 5000/= & Rs. 1.00 crore d) none of the above b) half yearly & marketing of the crop d) none of the ans= c ans =c

Repayment of CROP LOAN /KCC SHOULD BE -------------

14)

AB-1 DOCUMENT is meant for a) hypothecation b) mortagage Ans= a c) notice to borrower for repayment of loan d) not pertaining to agri.

15)

AB -3 DOCUMENT

is meant for

300

a) guarantee agreement c) mortagage deed

b) hypothecation agreement ans=c

d) NONE of the above

MULTIPLE CHOICE QUESTIONS 8

1. Crop loans are sanctioned for (a) Owners only (b) share croppers only (c) Tenants only (d) either A, B or C

301

2.

Revival letter AB4 & AB5 have to be affixed with stamps for __________ (a) Re.1.00 revenue stamp (b) 25 paise revenue stamp (c) Re.1.00 non-judicial adhesive stamp (d) None of the above

3.

For conversion of crop loan into term loan a request from the farmer borrower has to be made in (a) AB 6 (b) AB 3 (c) AB 7 (d) none of the above

4.

RBI AGL V is a return meant __________ (a) To know the amount of loan disbursed (b) To know the total outstanding (c) To know the recovery half-yearly (d) To know the recovery level annually

5.

SGSY has to be implemented ___________ (a) In all places irrespective of population (b) In rural and semi-urban areas only (c) In rural areas only (d) None of these

6.

Government subsidy available for DIR scheme is ____________ (a) 25% (b) 20% (c) 12% (d) None of these

7.

Spacing norms are waived for financing minor irrigation schemes in (a) Dark area (b) Gray area (c) White area (d) none of these

8.

What is the maximum repayment period permissible for Tractor loan? (a) 7 yrs. (b) 8 yrs. (c) 9 yrs. (d) 3 yrs.

302

9.

Limitation period for the Hypothecation Agreement AB1 in case of agricultural term loans (a) 3 years from the date of revival (b) 3 years from the date of demand (c) 3 years from the due date of repayment (d) 3 years from the due date of repayment / first overdue installment or from the date of demand whichever is earlier

10.

A Tractor is considered to have a minimum work of _______________ besides custom hiring service, per annum. (a) 600 hours of work (b) 5000 hours of work (c) 7000 hours of work (d) 1000 hours of work

11.

At least ______% of the total amount required for repayment of installment of tractor loan together with interest should come from the incremental income derived out of mechanization of beneficiaries farm (a) 25% (b) 40% (c) 50% (d) No such restrictions

13.

Daily transactions regarding the implementation of Annual Credit Action Plan is reported to Lead Bank in (a) LBR 1 (b) LBR 2 (c) LBR 3 (d) IRDP 1

14.

Inspection charges will be waived, for Agriculture for (a) All SGSY and DIR advance (b) SGSY and DIR advances upto Rs.5,000/(c) All SGSY DIR advances and other advances upto Rs.25,000/-

15.

Kharif season starts from (a) April to September (b) January to June (c) July to December (d) October to March

303

16.

Rabi season starts from (a) December to May (b) October to March (c) May to October (d) July to December

17.

What is the maximum loan limit under Land Purchase Scheme? (a) Rs.2.00 lacs (b) Rs.3.00 lacs (Excluding developmental charges) (c) Rs.5.00 lacs (Excluding developmental charges) (d) Rs.4.00 lacs (including developmental charges)

18.

To boost agro-processed food exports, Government of India has promoted (a) MPEDA (b) APEDA (c) APFEDA (d) DPAPDA

19.

Under the scheme for financing purchase of tractors below 18 HP, the repayment period fixed is (a) 9 years (b) 10 years (c) 12 years (d) 7 years

20.

Term loan for the purchase of movable assets can be sanctioned without insisting for collateral security upto (a) Rs.25000/- (b) Rs.10000/(c) Rs.20000/- (d) Rs.50000/-

21.

Running cash credit facility for crop cultivation is considered as part of ____________ account only for accounting purposes (a) Agri Term Loan (b) Demand Loan (c) Part of Cash Credit (d) ACC

22.

Total interest debited should not exceed the principle amount in case of short term loans sanctioned to (a) High-tech Agri borrowers (b) SF/MF (c) DRI borrowers (d) None of the above

23.

Irrigation projects with cultivable command area upto _____ hectares are classified under minor irrigation scheme (a) 1000 (b) 5000

304

(c) 2000 (d) 10,000 24. __________________ is not an organic manure (a) Oil cake (b) Farm yard manure (c) Bone meal (d) Potash 25. What is maximum limit that can be granted under Produce marketing loan? (a) Rs.5.00 lacs (b) Rs.3.00 lacs (c) Rs.2.00 lacs (d) Rs.10.00 lacs or 60%-80% of value of produce 26. Agricultural Term Loans are granted for: (a) Purchase of seeds, manures and fertilizers (b) Purchase of pesticides (c) Purchase of durable assets (d) All of these 27. Lactation period in respect of milch animals refers to (a) The period during which the animal gives milk (b) The period between the date of conception and date of giving birth to young one (c) Inter-calving period (Time gap between the two dates of giving birth to young ones) (d) The age at which the animal starts giving milk 28. Gestation period refers to: (a) Repayment period of a term loan (b) Period between disbursement of loan and closure of loan (c) Moratorium period of no-repayment (d) Time taken for sanction of loan

29.

The purpose of Inspection in Agriculture is (a) Service area oriented (b) Farm oriented

305

(c) Village oriented (d) Farmer oriented 30. One of the functions given here is not performed by Lead Bank (a) To survey credit needs (b) Develop Branch Banking (c) Provide infrastructure to all Bank Branches (d) Enable extension of credit facilities 31. When an EM is created it is valid for a period of (a) 12 years (b) 13 years (c) 30 years (d) 6 years 32. As per government directives, the share of weaker section in Banks advance should be (a) 12% of total advance (b) 1% of total advance (c) 20% of priority sector advances (d) 10% of total advances 33. Agricultural labourer is one (a) Who owns less than 0.5 acres, earns 50% of income from Agriculture. (b) Who is landless and work in farms owned by others. (c) Who earns 55% of income through farm labour. (d) Who is not an industrial worker. 34. ________________ is the committee which recommended simplification of loan application forms and documents for agricultural finance (a) Krishnaswamy Committee (b) Ghosh Committee (c) R.V. Gupta Committee (d) Oza Committee 35. To avail of Kisan Credit Card, minimum production credit limit requirement should not be less than (a) Rs.3000/- (b) Rs.10000/(c) Rs.20000/- (d) Rs.100000/-

306

36.

Under Agricultural Segment, the collateral security / third party guarantee is waived upto a limit of ____________ in respect of crop loans (a) Rs.10000/- (b) Rs.15000/(c) Rs.50000/- (d) Rs.25000/-

37.

Advantage of Kisan Credit Card over Agricultural Cash Credit is (a) Cheaper interest rate (b) Permits any number of drawals / repayment within the limit (c) Provides for contingent needs to a limited extent (d) b and c above

38.

Loan under Kisan Credit Card (KCC) will be accounted for under (a) Agricultural Cash Credit (b) SBI Credit Card account (c) Demand Loan (d) Agri. Term Loan

39.

Maximum loan under DIR scheme is __________ for general purposes is (a) Rs.1500/- (b) Rs.5000/(c) Rs.15000/- (d) Rs.10000/(e) None of these

40.

Loans granted for consumption needs of farmers, the branch may charge interest at (a) 10% (b) Same rate as stipulated under Short Term Loan (c) 4% (d) 12.5%

41.

What is the maximum amount of loan that can be sanctioned without mortgage / charge over the assets under A.T.L. where in no movable assets are created? (a) Rs.1000/- (b) Rs.2000/(c) Rs.5000/- (d) Rs.10000/-

42.

The mandatory percentage of Agricultural advances to Total Advances is _______

307

(a) 15% (b) 18% (c) 47% (d) 50% 43. Amount of loan permitted to meet contingent need of the farmer under Kisan Credit Card is (a) 20% of the peak level credit limit sanctioned for production purposes (b) No provision for contingent need (c) 15% of the peak credit limit sanctioned for production purposes without any ceiling (d) 10% of the peak credit limit sanctioned for production purposes 44. Field Officers can now sanction loans upto (a) Rs.2.00 lacs (b) Rs.1.00 lac (c) Corresponding to the powers of BMs of same grade. (d) No power 45. The limit of crop loan to individual sugarcane grower that can be sanctioned without collateral security under tie-up arrangement with the sugar mill is (a) Rs.15000/- (b) Rs.45000/(c) Rs.200000/- (d) Rs.25000/46. Under agricultural segment no due certificates need not be insisted upon in case of new loans upto (a) Rs.10,000 (b) Rs.50,000 (c) Rs.45,000 (d) None of the above 47. Amount of produce marketing loan against pledge / hypothecation under priority sector may be granted: (a) Upto Rs.10,000/- to any agriculturist for three months (b) Upto Rs.5 lacs to crop loan borrowers for three months

308

(c) Upto Rs.1 lac to crop loan borrowers for six months (d) Upto Rs.10 lac to crop loan borrowers for twelve months 48. Advances upto Rs.25 lacs for distribution of inputs to allied agricultural activities is extended as: (a) Direct agricultural advances under priority sector (b) Indirect agricultural advances under priority sector (c) Indirect advances under C&I sector (d) Indirect advances under SIB sector 49. KCC facility for agriculture should be reviewed at (a) After 3 years (b) Annually (c) Half yearly (d) Quarterly 50. Under group life insurance scheme for SHG, the cover available to the nominee incase of accidental death is (a) Rs.6000/- (b) Rs.25000/(c) Rs.5000/- (d) Rs.12000/51. What is the maximum amount of risk covered in Personal Accident Insurance Scheme for KCC holders? (a) Rs.50000/- (b) Rs.1.00 lac (c) Rs.25000/- (d) Rs.75000/52. Loans to small and marginal farmers for purchase of shares of agro-based units are to be treated as (a) Direct agricultural finance (b) Indirect finance to agriculture (c) P segment finance (d) SIB segment 53. Branches need not insist for collateral security for loans to self help groups (SHG) without Government assistance. (a) Limits upto Rs.500000/- per group (b) Limits upto Rs.25000/- per group

309

(c) Limits upto Rs.50000/- per group (d) Limits upto Rs.10000/- per group 54. In case of natural calamity while restructuring the crop loan to term loan (a) Principal outstanding will be converted (b) Principal and interest will be converted (c) only interest portion will be converted (d) none of the above 55. Loans disbursed to SHGs are to be reported under (a) Agricultural segment (b) Small business segment (c) personal segment (d) SIB segment 56. For the purpose of arriving at loan to savings ratio under SHG, savings means (a) Balance in the savings bank account maintained by the group (b) Balance in the savings bank account, cash on hand and loan amount outstanding with the group members (c) Amount deposited in fixed deposit account as security to the proposed loan (d) Balance in savings bank account and cash on hand 57. Subsidy available to individual beneficiary under SGSY is (a) 25% of the loan amount subject to a maximum of Rs.6000 (b) 30% of the Project Cost subject to a maximum of Rs.7500 for individuals and 50% of the Project Cost subject to a maximum of Rs.10000 for SC/ST. (c) 50% of the loan amount subject to a maximum of Rs.7500 (d) 50% of the loan amount subject to a maximum of Rs.10000 58. While financing SELF HELP GROUPS, the group should be in active existence for at least

310

(a) 1 month (b) 6 months (c) 1 year (d) 5 months 59. Finance extended (ceiling upto Rs. 20 lacs) to dealers in drip irrigation is considered as (a) SBF advance (b) Indirect agri advance (c) Direct agri advance (d) None of the above 60. NABARD Unit cost as stipulated for various kinds of activities financed by commercial banks (a) cannot be violated (b) 10% increase can be made (c) It is only indicative and hence may be violated (d) None of the above 61. Subsidy available to a group (SHG) under SGSY is (a) 25% of the cost of the project subject to a ceiling of Rs.1 lac (b) 50% of the cost of the scheme subject to a ceiling of Rs.1.25 lac (c) 33 1/3% of the cost of the scheme subject to a ceiling of Rs.1.50 lac (c) 33 1/3% of the cost of the scheme subject to a ceiling of Rs.1.25 lac 62. Under SGSY, focus on the vulnerable groups among the rural poor is (a) 50% SC/ST, 40% women and 3% disabled swarozgaris (b) 33 1/3% SC/ST and 33 1/3% women (c) 25% SC/ST and 50% women (d) none of the above 63. All loans sanctioned under SGSY should have minimum repayment period of __ (a) 36 months (b) 48 months (c) 60 months (d) 84 months 64. What is the limit upto which collateral security is waived for Dairy Plus Scheme a. Rs.25000

311

b. Rs.50000 c. Rs.1.00 lac d. Any limit 65. The security norms for financing diversifying crops under CONTRACT FARMING is a. Hypothecation of crops and collateral security. b. Hypothecation of crops and waiver of collateral security for limits up to Rs.1 lac. c. Only group guarantee. d. None of the above. 66. Loans / Overdrafts given to farmers against FD/KVP etc. should be classified as . a. Direct finance to Agriculture. b. Indirect finance to Agriculture. c. Finance to Allied Agricultural activities. d. None of the above. 67. Development loans to all plantations, horticulture, forestry and wasteland have to be classified as . a. Direct finance to Agriculture. b. Indirect finance to Agriculture. c. Finance to Allied Agricultural activities. d. None of the above. 68. All in All out System is connected with a. Fisheries (b) Dairy (c) Poultry (d) Horticulture 69. What is the minimum Flock size under Broiler Plus Scheme? (a) 3000 Birds (b) 4000 Birds (c) 5000 Birds (d) 10000 Birds 70. Vermiculture refers to

312

a. Growing of birds (b) bee keeping (c) rearing of earth worms(d) mushroom cultivation 72. Housing loan Scheme available for SHGs is known as (a) Gram Niwas (b) Sahyog Niwas (c) Golden Jubilee Special RHS (d) None of the above 73. Minimum number of members in a SHG should be (a) 10 (b) 15 (c) 20 (d) 25 74. Who can promote SHGs? (a) NGO (b) SHPI (c) Banker (d) All the above 75. What is the validity period of Kisan Gold Card? (a) 1 year (b) 2 years (c) 3 years (d) 5 years 76. The following expenses may be considered under Land Purchase Scheme. (a) Cost of land (b) Registration charges/Stamp duty (c) Purchase of farm equipments (d) All the above 77. Collateral security is waived for setting up of Agri. clinic/Agri. Business Centres is waived upto (a) Rs.1.00 lac (b) Rs.2.00 lacs (c) Rs.3.00 lacs (d) Rs.5.00 lacs 78. Loans granted to Commission agents under Arthias Plus Scheme is classified under (a) Agri. Seg. (b) SIB (c) C&I (d) All the above depending upon the loan limit 79. The scheme Cyber plus refers to (a) Setting up Super Markets (b) Setting up Chain Stores (c) Setting up Internet Centres in Rural/Semi-Urban areas

313

(d) All the above 80. Green channel programme for excellence refers to (a) Issuing maximum number of KCC (b) Issuing maximum number of KGC (c) Award for best agriculturist in a branch (d) None of the above 81. The advantage of contract farming (a) Quality inputs (b) Technical guidance (c) Buy back arrangement (d) All the above 82. While financing of second hand tractor, one of the following need not be obtained: a. hypothecation termination letter b. supplementary hypothecation letter c. AB1 83. d. arrangement letter Mixed farming means a. multiple cropping b. availing of crop loan and gold loan c. undertaking cultivation and allied activities d. none of these

KEY TO AGRICULTURE I 1 2 3 4 5 6 7 D D C D C B D 21 22 23 24 25 26 27 D B C D D C A 41 A 42 B 43 A 44 C 45 C 46 D 47 D 61 62 63 64 65 66 67 B A C C B A A

314

8 9 10 11 12 13 14 15 16 17 18 19 20 81

C D A C * B C A B C B C D D

28 29 30 31 32 33 34 35 36 37 38 39 40 82

C D C A D A C A C D A C B A

48 B 49 B 50 B 51 A 52 B 53 A 54 B 55 A 56 B 57 B 58 B 59 C 60 C 83 C

68 69 70 71 72 73 74 75 76 77 78 79 80

C C C * B A D A D D D C D

MULTIPLE CHOICE QUESTIONS 9

1. The objectives of extending agri. gold loans are: a. To increase the liquidity to meet crop production expenses b. Investment expenses related to agriculture c. Investment expenses related to allied activities d. Any other expenses related to agriculture e. All the above

315

02.

Maximum amount of gold loan sanctioned under Agri: a. Rs.50000/b. Rs.300000/c. Rs.500000/d. Depends on the advance value of the Gold and the requirement of the farmer.

03.

Maximum repayment period given under Agri Gold Loan: a. 12 months for short term loan b. 30 months for meeting investment expenses c. Either a or b d. None of the above

04.

For availing Produce Marketing Loan the eligible customers are: a. All our existing borrowers good track record only b. All non-overdue borrowers also c. Crop loan borrowers of other Banks d. Non-Borrower Farmers e. All of them can be considered.

05.

When the loan is sanctioned against Ware House Receipts Collateral is needed: a. When the loan amount exceeds Rs.50000/b. When the loan amount exceeds Rs.500000/c. When the loan amount exceeds Rs.1000000/d. None of the above

06.

What is the margin to be brought in by the farmer under Kisan Credit Card? a. Up to Rs.50000/- Nil b. Above Rs.50000/- 15 to 25 % c. Scale of finance applied No Margin d. None of the above

316

07.

Under Kisan Credit Card, when the loan is sanctioned with tie up arrangements we need not obtain collateral security up to: a. Rs.50000/b. Rs.100000/c. Rs.200000/d. None of the above

08. What is the maximum loan amount sanctioned under Kisan Credit Card? a. Rs.50000/b. Rs.100000/c. Rs.200000/d. It depends on the cropping pattern, land holding and scale of finance. e. None of the above. 09. Maximum loan can be sanctioned under Kisan Gold Card Scheme: a. Rs.100000/b. Rs.1000000/c. Rs.1000000/- minus term loan outstanding if any d. 5 times of annual income or 50% of value of land to be mortgaged whichever is more e. Either [c] or [d] 10. The purpose for which the Kisan Gold Card scheme promoted: a. To take care investment needs of the farmer only b. To take care production needs of the farmer only c. To take care investments needs and also consumption needs of the farmer d. Either [a] or [b] e. None of the above 11. The consumption loan under KGC can be included: a. Education Expenses b. Marriage Expenses c. Medical Expenses

317

d. Local Function Expenses e. All the above 12. The loan considered for under Land Purchase Scheme: a. Cost of Land b. Provision of irrigation facilities and land development c. Purchase of farm equipments d. Registration charges and stamp duty e. All the above 13. Eligibility under Land Purchase Scheme: a. Small and Marginal Farmers only b. Tenant Cultivators only c. Share Croppers only d. Landless Agricultural Labourers only e. All of them 14. Maximum loan amount under Land Purchase Scheme: a. Rs.200000/b. Rs.50000/c. Rs.500000/d. Rs.500000/- [Excluding development changes] e. None of the above 15. Eligibility under Dairy Society Plus Scheme a. Milk Societies registered and affiliated to District Milk Union b. Supplying 1000 lit/day to Milk Units c. Earning pretax profits for the last two years d. Borrowing Powers as per bye-law s of the society e. All the above 16. Purpose for which the loan can be sanctioned under Dairy Society Plus: a. Construction of Milk house or society office b. Purchase of Automatic Milk collection system

318

c. Purchase of transport vehicles d. Purchase of Bulk chilling unit e. All the above 17. Maximum loan amount can be sanctioned under Dairy Society Plus: a. Maximum two times the average profit of previous 2 years b. Maximum four times the average profit of previous 2 years c. Maximum six times the average profit of previous 2 years d. Maximum four times the average profit of previous 2 years or Rs.1000000/e. None of the above 18. What are all the objectives of setting up of Agri-Clinic and Agri Business Centres a. To augment support and extension services for agriculture b. To provide a package of soil and input testing facilities and other consultancy services c. To strengthen transfer of technology and extension of services d. To provide self employment opportunities to technically trained persons e. All the above 19. Scheme for financing commission Agents Arthias Plus Scheme: Eligibility for classifying under agriculture segment: a. Commission agents holding a valid license from market yard b. Commission agents should be in the line of operation for the past 3 years c. Commission agents having receivables from farmers only d. Commission agents functioning in rural and semi urban markets/mandis e. All the above 20. Maximum amount of loan can be sanctioned under Arthias Plus Scheme a. Rs.1000000/- b. Rs.2000000/c. Rs.2500000/- d. Rs.5000000/e. None of the above

319

21.

The objectives for financing Cold Storage: a. To promote setting up of cold storage and reducing post harvest losses b. To create cold chain infrastructure from farm to the consumer c. To modernize/rehabilitate cold storages d. All the above e. None of the above

22.

Under Scheme for Financing Seed Processors, the maximum loan can be sanctioned: a. Rs.1000000/b. Rs.2000000/c. No limit d. Need based limit no upper ceiling but above Rs.200000/e. None of the above

23.

Under the scheme for development and strengthening of Infrastructure facilities for production and distribution of seeds, the eligible organizations are: a. Private Companies b. Individual Entrepreneurs c. Self Help Groups d. Seed Co-operatives e. All the above

24.

Maximum credit limit can be sanctioned under SHG Credit Card and SHG Gold Card: a. Rs.25000/- and Rs.50000/b. Rs.50000/- and Rs.100000/c. Rs.100000/- and Rs.200000/d. Rs.50000/- and Rs.200000/e. None of these

320

25.

Under the scheme [capital investment subsidy scheme for commercial production units of organic inputs] manufacturing of organic inputs are: a. Biofertilisers Unit b. Vermiculture Hatcheries c. Fruit and Vegetable Waste Compost Unit d. All the above. e. None of the above

26.

Mortgage loan to Seed Processing Units Scheme the minimum and maximum loan can be sanctioned: a. Rs.500000/ and Rs.10000000/b. Rs.1000000/- and Rs.10000000/c. Rs.200000/- and Rs.10000000/d. None of the above

27.

The objectives of introducing financing of joint liability groups of Tenant Farmers: a. To augment flow of credit to tenant farmers, share croppers b. To extend collateral free loans to target clients through JLG scheme c. To build mutual trust and confidence between bank and tenant farmers. d. All the above e. None of the above

KEY TO AGRICULTURE 1. e 16. e 2 d 17. d 3 c 18 e 4 e 19 e 5 c 20 c c 21. d 6 c 22 d 7 d 23 e 8 e 24 d 9 c 25 d 10. e 26 a 11 e 27 d 12 13 e d 14 e 15

321

MULTIPLE CHOICE QUESTIONS 10

1. Indirect Agriculture advance should not exceed -------- of total target for agricultural financing a) 50% b) 30% c) 25% d) None of above

322

2.

Loans up to Rs.------- for financing distribution of inputs for the allied activities is treated as indirect agriculture advance under Priority sector lending. a) 25.00 lacs b) 40.00 lacs c) 50.00 lacs d) None of above

3.

In case of Agricultural Term loans (where assets are created), norms for obtaining collateral security have been relaxed for limits up to -----a) Rs. 10000/- b) Rs.25000/c) Rs. 50000/- d) Rs. 500000/-

4.

Deed of guarantee Document AB2 can be revived by the Guarantor by executing -------. a) AB4 b) AB5 c) AB7 d) None of the above

5.

While granting limits under KCC, the scale of finance, is prepared by---a) District Technical Committee b) District Consultative Committee c) Block level Consultative Committee d) None of above

6.

Purpose for which Crop Loans/KCC can be granted.-------------a) Cost of labour for various operations b) Harvesting and Threshing c) High yielding variety of seeds d) All of the above

7.

Detailed opinion reports are to be complied only on such borrowers whose aggregate Agricultural advances exceed ------------. a) Rs. 25,000/b) Rs. 50,000/c) Rs. 1,00,000/d) None of the above

323

8.

What are the conditions, under which entire crop loan /KCC can be disbursed in cash. a) Recovery % age of Branch should be 50% or more as on 30th June b) The loan amount should be up to a limit of Rs.10,000/c) The borrower should possess a good track record d) All of the above

9.

Kisan Gold Card Scheme has been launched with a view to provide___________ a) Gold to the needy farmers b) Status symbol to the farmers c) Flexibility and choice to the farmers in regard to the amount, time, purpose including consumption needs and repayment schedule within prescribed outer limit. d) None of the above.

10.

Following farmers are eligible to get Kisan Gold Card--------------a) All Farmers irrespective of their previous track record. b) Only selected farmers with handsome land holding. c) Farmers irrespective of their land holdings, with good track record of repayment in their ACC & ATL accounts for the last two years as on the date of application. d) None of the above

11.

The borrower can avail loan to the extent of _______% of the limit sanctioned for consumption purposes under KGC. a) 20% b) 30% c) 40% d) 50%

12.

The objectives for launching KCC are ________________.

324

a) To provide Credit Cards like SBI Card to get payment from any part of the Country. b) To provide Credit Cards to farmers to avail loan facility within the district. c) To provide adequate and timely support from banking system to the farmers for their short term production credit needs for cultivation of crops, purchase of inputs, in a flexible and cost effective manner. c) All of the above 13. The following farmers are eligible to get KCC _______________ a) Existing borrowers of the branch/ bank having good track record for the last Two years. b) Requiring production credit limit of Rs. 3000/- and above. c) New borrowers provided Branch Manager is satisfied with their Creditworthiness. d) All of the above. 14. Following needs of the farmer are treated as contingent needs under KCC________ a) Family maintenance expenses. b) Educational and Medical Expenses. c) Social & Religious ceremonies d) All of the above. 15. While fixing limit of the borrower under KCC, the branch may take into Account production credit requirements of the farmer for________ a) A Month b) A Quarter c) A Half- Year d) A Year 16. The Kisan Credit Card is valid for a period of ________years. a) One year b) Two years c) Three years. d) None of the above 17. Inspection of irregular tractor loan account is conducted at___intervals.

325

a) Monthly b) Quarterly c) Half yearly d) None of the above 18. What is the minimum margin required for financing a new tractor-----------a) 10% of the cost. b) 25% of the cost c) 30% of the cost d) No margin is required 19. In case of Tractor loans Comprehensive Insurance is necessary----------a) In all cases b) Comprehensive insurance may be waived and 3rd party insurance can be taken after obtaining a suitable letter of undertaking. c) Comprehensive insurance is not required in any case d) No insurance is required at all. 20. ---------activities are treated as Allied Agricultural Activities. a) Dairy Farming b) Setting up cold storages c) Financing to SHG d) None of the above 21. What is the eligibility criteria for financing under Dairy plus scheme-----a) Applicant below the age of 45 years b) Applicant should be member of milk producing society for more than 2 years, producing and selling at least 1000 litres of milk per year to the society. c) Should own minimum 0.25 acre of land for every 5 animals for cultivation of fodder, if Dairy unit having less than 10 animals and one-acre for every 5 animals for units having animals10 and above. d) All of the above. 22. Security to be obtained for loans up to Rs. 1,00,000/- under Dairy Plus Scheme---a) Mortgage of land b) Third party Guarantee

326

c) Hypothecation of assets purchased with bank finance. d) No security to be obtained 23. Loan under Produce Marketing Loan scheme is sanctioned --------------a) To provide finance to farmers to purchase produces from the market. b) To provide finance to farmers to avoid distress selling. c) both a & b d) None of the above 24. Under Produce Marketing Loan scheme, full insurance cover to be obtained, if value of stock exceeds---------------------a) Rs.10, 000/- b) Rs.15, 000/c) Rs.25, 000/- d) No insurance required 25. What is the eligibility criteria for financing under Land Purchase scheme--a) SF/ MF/ Tenants/Share croppers owning less than 5 acres un-irrigated or 2.5 acres irrigated land including purchase of land under the scheme. b) All existing borrowers with good track record of repayment without any land ceiling c) Any farmer provided land being purchased is for dwelling purpose. d) None of the above. 26. Loan under Land Purchase scheme is sanctioned for --------------------purposes. a) Purchase of land for construction of clinic b) Purchase of land for construction of house. c) To purchase land for Agriculture. d) None of the above. 27. Amount of annual premium to be paid to designated Insurance Co. under Personal Accident Insurance Scheme is ---------------------------a) 1% of KCC limit per KCC holder b) 2% of KCC limit per KCC holder c) Rs.15/- per KCC holder

327

d) None of the above 28. What are the objectives of scheme for financing under Contract Farming---a)To provide quality agriculture inputs, efficient extension service and arranging financial assistance for quality produce, avoiding middlemen, and to ensure assured repayment. b) To enter into a contract with the borrower for providing finance without any security c) Both a & b d) None of the above 29. For financing under Contract Farming the beneficiary is a) Farmer b) Contract Farming Company c) Bank d) Win Win situation for all the three parties. 30. SHPI stands for--------------a) Self Help Group Promotion Institutions b) Sahayata Hetu Provisions Insured c) Satisfaction and Harmony Purposes Insisted d) None of the above 31. Who is responsible for repayment of SHG loans? a) The NGO who formed the group b) The leader of the group c) All the members jointly and severally d) None of the above 32 Who decides the rules and regulations for SHG---------------? a) The facilitator (who forms the group) b) The banker c) The leader of the group d) All the members of the group with their collective wisdom.

328

33.

What is maximum Quantum of finance for financing to SHG-----------? a) Up to Rs. 50,000/b) Up to 4 times of the corpus of the group Max. Rs. 50000/c) Up to 4 times of the corpus of the group d) None of the above

34.

SB account and loan account to SHG should be opened in the name of --a) The leader of the group b) Office bearers of the group c) All the members of the group jointly d) Self Help Group only

35.

Direct lending to SHG means----------------a) Loans are sanctioned directly to the members of the SHG b) Loans are sanctioned directly to NGO/SHPI, who provides finance directly to the members of SHG c) Loans are sanctioned directly to SHG. d) None of the above

36.

SGSY stands for--------------a) Self Help Group Service Yozna b) Sri Ganga Sewa Yozna c) Swarna Jayanthi Gram Swarozgar Yozna d) None of the above

37.

Beneficiaries under SGSY scheme are called --------------a) Swarozgaris b) Self-Employed c) Group Member d) None of the above

38.

What are the objectives of SGSY scheme--------------. a) To bring assisted families above poverty line in 3 years by providing them with income generating assets.

329

b) To provide employment to every person in rural areas. c) To create opportunities for swarozgar for every person in the country. d) None of the above 39. In which account, the subsidy received from DRDA under SGSY scheme (the account titled as SGSY SUBSIDY RESERVE FUND ACCOUNT) is kept--a) S B account b) TDR c) Current Account d) STDR 40. Under Sahyog Niwas Scheme, SHG will on-lend to its members for purchase / construction of house, subject to a maximum of Rs. --------------a) Rs. 25,000/- per member b) Rs. 50,000/- per member c) Rs.75,000/-per member. d) Rs.1,00,000/-per member. 41. The maximum period for repayment of loan under Sahyog Niwas Scheme is-------a) 10 years b) 15 years c) 20 years d) No limit 42. What is maximum ceiling on subsidy per project for SC/ST entrepreneurs and their cooperatives under Capital Investment Subsidy Scheme for construction of Rural Godowns. a) Rs. 25.00 lac b) Rs.37.50 lac c) Rs. 50.00 lac d) No ceiling 43. For take over of ACC account from other Bank/Financial institution, minimum amount should be-----------a) Rs. 1.00 lac b) Rs.10.00 lac c) Rs. 20.00 lac d) No such stipulation

330

44.

For take over of ATL account from other Bank/Financial institution for allied activities, minimum amount should be-----------a) Rs. 1.00 lac b) Rs.10.00 lac c) Rs. 20.00 lac d) No such stipulation

45.

For take over of ATL account from other Bank/Financial institution for other than allied activities, minimum amount should be-----------a) Rs. 1.00 lac b) Rs.10.00 lac c) Rs. 20.00 lac d) No such stipulation

46.

If, targets under Agriculture financing are not achieved, shortfall is to be contributed to-a) RBI b) Central Govt. c) Rural Infrastructure Bonds of NABARD d) None of the above

47.

Maximum loan under DIR scheme is __________ for housing purposes is a) Rs. 15000/- b) Rs.10000/- c) Rs.20,000/- d) Rs.25000/-

KEY TO AGRI QUESTIONNAIRE II 1= C 9= C 17 = A 25= A 33 = C 41=B 2 = B 10= C 18 = A 26 = C 34 = D 42=C 3 = C 11 = A 19 =B 27= C 35 =C 4 = B 12= C 20 =A 28 = A 36=C 5 = D 13 = D 21 = D 29 = D 37=A 47=C 6 = D 7 =C 23= B 8= D 16 =C 32 = D 24= B 14 = D 15 =D 31 = C 40-=B

22= C 30 = A

38=A 39= C

43=A 44=B 45=C 46=C

MULTIPLE CHOICE QUESTIONS 11

1. Which of the following instruments cannot be made payable otherwise than on demand?

331

a. Bill of Exchange

b. Cheque

c. Promissory Note

d. None of these

2. Not Negotiable crossing implies that: a. The collecting bank should satisfy itself as to the title of the holder before collecting the cheque. b. The cheque cannot be negotiated. c. The cheque cannot be collected, as the protection under section 131 of the Negotiable Instruments Act 1881 is not available in such cases. d. The transferee shall not have and shall not be capable of giving a better title to the cheque than that of the transferor. 3. Section 127 of the Negotiable Instruments Act, 1881 prohibits payment of a cheque: a. Crossed specially to more than one banker except where the second banker acts as an agent for collection of the first banker. b. Bearing general crossing. c. Bearing forged signature. d. The one which is presented after usual banking hours. 4. In terms of section 10 of the negotiable Instruments Act, 1881 the essentials of a payment in due course are: a. The payment should be made in accordance with the apparent tenor of the instrument. b. The person to whom it is made should be in possession of the Instrument. c. The payment should be made in good faith, without negligence and under circumstances, which do not afford a reasonable ground for believing that the person to whom it is made is not entitled to receive the amount. d. All of these. 5. A the payee of the cheque for Rs.10,000/- drawn on your Bank informs you that he has lost the cheque. He asks you not to pay the cheque, if presented, till

332

he arranges stop instruction form the drawer. presented in clearing. The bank will: a. note stop instruction and return the cheque

Meanwhile, the cheque is

b. pay the cheque as there is no privity of contract between the Bank and A. c. Return the cheque with the reason Cheque Reported lost: Awaiting confirmation of the drawer. Please present again 6. Negotiable Instrument is defined under section: a. 13 b. 23 c. 35 d. 29 7. Negotiation of an instrument means a] Payment of the instrument b] Transfer of the instrument from one person to another c] Transfer of instrument to any person so as to constitute that person as the holder thereof. d] Encashment of instrument. 8. Trade bills are drawn for genuine trade transactions whereas the Accommodation Bill is drawn for a] To provide financial help to some person c] None of these 9. Protest is a formal certificate of dishonor given by: a] The notary public c] Third party b] The Banker d] None of these. b] To realize a debt d) Kite Flying

10. Holder in due course is the person: a] Who became possessor to the instrument for consideration b] Who has taken it before maturity of the instrument and c] In good faith without being aware of the defect in title d] All of these. 11. Material alteration affects: a] Rights and liabilities of parties to the bill

333

b] Discharges all the parties liable on the bill c] Will not affect the liability of the party subsequent to the alteration d] [a], [b] and [c] 12. Bank has paid a forged cheque of a customer who was negligent in keeping the custody of a cheque book and payment thereof. In this case: a] Bank is not liable as this will mean payment in due course b] Customer is responsible for the loss c] Bank has no mandate to pay such a cheque d] None of these 13. A cheque payable to a trust account was collected and credited to the personal account of one of the trustees: a] The bank will not be held liable for conversion b] The bank is not liable for conversion if other trustees have confirmed c] The bank will be held liable for conversion if he has not made proper enquiry d] None of these 14. Probate of a will is issued by the Court under: a] Indian Succession Act c] Indian Contract Act 15. Dayabhagha relates to: a] Hindu law c] Adoption among Hindus a] 20 b] 10 b] A method of land cultivation d) Mohammadan Law c] 2 d] none of these b] Banking Regulations Act d ] Hindu Succession Act

16. The maximum number of partners in a banking firm shall not exceed

17. Non-registration of a firm with the Registrar of Assurances attracts the following disability. a] Creditors cannot sue the firm b] The firm cannot sue the debtors

334

c] Partnership cannot be wound up more he is declared as legally dead. a) 7 years Regulations Act. a) 118 b) 45ZA c) 138 b) 18 years

d) No disability is attracted

18 A person whose whereabouts are not known is for a period of .......years or c) 21 years d) None of these

19. Nomination in deposit a/cs is permissible under Sec.. of Banking d) All of these

20. An IT Attachment order is received by your branch attaching the funds of Shri Nagendra. However, your branch is having a current a/c in the joint names of Shri Nagendra and Sudheendra and no individual account is maintained in the name of Shri Nagendra. You will: a] Attach the joint account and not allow any operation b] Inform the IT authorities that no account is being maintained by Shri Nagendra c] Attach 50% of the balance in the joint account d) You do not take cognizance of the attachment order 21. Bankers right of set off against real and existing debts has precedence over: a] Court attachment order b] Revenue attachment order c] a & b d) None of the above 22. Bankers lien is a general lien and specially conferred by: a] Section 5 of the Banking Regulations Act 1949 b] Section 69 of Negotiable Instrument Act 1881 c] Section 171 of the Indian Contract Act 1872 d] None of these 23. BCTT means: a) Bankers cheque & Telegraphic Transfers

335

b) c) d)

Banking Companies Takeovers and Transfers Banking Cash Transaction Tax None of the above 24. BCTT has been passed under: a) Banking Regulation Act c) State Bank of India Act 25. The objective behind BCTT is: a) Earning revenue b) Reducing use of currency notes b) Curbing black money and tracking large cash transactions d) All the above ANSWER= b) Finance Act d) None of the above

1 6 11 16 21

b a d b c

2 7 12 17 22

d c c b c

3 8 13 18 23

a a c a c

4 9 14 19 24

d a a b b

5 10 15 20 25

b d a b b

RATIONALE
1. Scale of finance in case of crop loans varies from place to place.

336

R. It varies with the cost of cultivation from place to place depending upon the agro climatic characteristics of the region and varied cost of different input components. 2. There is no need to deduct margin from scale of finance while sanctioning crop loans. R. The scale of finance is cost of cultivation minus margin. Therefore, entire amount as per scale of finance can be financed. 3. Consumption Loans are sanctioned to weaker section borrowers in addition to other facilities. R. To meet essential obligatory unforeseen expenses. To meet essential needs of the borrowers until the scheme takes off. To prevent withdrawal of funds for the borrowers sustenance needs from the funds invested in the Scheme. 4. Crop Loans are to be sanctioned only during the season. R. Crop loans are sanctioned to meet the cultivation expenses to grow the crops and therefore help to obviate diversion of funds for unproductive purposes. 5. Two months cushion period is added for repayment after harvest of the crops. R. The peak harvest prices will be low. To enable the farmer get a better price after announcement of support price by the Government. Further, there will not be any buyers for the produce in view of wetness it contains soon after harvest. This is to enable the farmer to sell his produce i.e. marketing time. 6. Minimum two milch animals are to be financed under dairy farming scheme. R. In order to ensure continuous and uninterrupted income through dairy, even when one animal goes dry as the animal has two phases of life cycle i.e. lactation period (milk period) and dry period. 7. Separate D.P.Note need not be obtained while taking hypothecation agreement on Form AB1.

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R. The DP note clause is embedded in the Hypothecation agreement itself. Borrowers personal liability clause takes care of demand promissory legalities. 8. Photographs are taken for literate Agricultural borrowers also. R. It serves to identify the borrowers/guarantors easily. photos. 9. In case of illiterate borrowers/guarantors the thumb impressions should not be attested on the documents. R. It should not be attested as it attracts ad valorem stamp duty. Instead, a separate letter on form AGR-9 is to be obtained from two witnesses to prove that the contents of the document were explained in a language known to the borrower/guarantor. 10. The repayment period of Agricultural gold loans is linked to harvesting season. R. Agricultural gold loans are sanctioned for either meeting the shortfall in expenses in cultivation of crops or for acquisition of unproductive assets. Therefore, the repayment shall be fixed with reference to the due date of harvest as payment capacity likely to be greater in harvesting season. 11. Comprehensive Crop Insurance Scheme is introduced by the Government. R. To provide relief to farmers in the event of failure of crops due to natural calamities and to encourage farmers to take loans from banks without fear of burden of non-repayment. 12. Fresh AB1 need not be obtained at the time of renewal and only revival letters are to be obtained once in 3 years. R. AB1 agreement contains suitable continuity clause so that credit balance or nil balance in the loan account will not necessitate obtention of fresh documents. Personal liability clause in AB1 in terms of Limitation Act necessitates obtention of revival letter once in 3 years. 13. NABARD has introduced eligibility criteria for withdrawal of refinance. Further, villagers have similar names. It enables the Bank to identify them with the help of

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R. To ensure the quality of lending the NABARD insists for minimum recovery percentage so as to decide the eligibility of banks for the withdrawal of refinance. 14. Loans for cultivation of Horticulture and plantation crops are given as Agricultural Term Loans whereas for cereal crops like paddy it is given as Agricultural Cash Credit. R. These crops have long gestation period and long bearing life. The cost of cultivation is also very high. As the income accrues over a period of years they are sanctioned as Term Loan which is repayable from cash accruals. 15. Spacing norms for location of wells are stipulated by NABARD. R. If wells are constructed too close they are likely to interfere with each other resulting in lowering of discharge. Hence, it is not viable. This may result in failed wells and accounts becoming NPA. 16. Poultry Farming should be financed only when there is immediate assured market. R. 1.Eggs which is perishable should find a ready market without loss of time. 2. Poultry is capital intensive project and repayment is to be based on profits generated. 17. The requirement of obtention of No dues Certificate has been dispensed with in certain cases, in the Agriculture Segment advances. R. This is in accordance with the Gupta Committee recommendations. (ii) To avoid unnecessary inconvenience to small farmers. 18. Interest on Agricultural Term Loans is calculated in May and November. R. It coincides with harvesting of kharif & rabi crops and it is easier & convenient to repay the instalments and interest from the sale proceeds and will not result in compounding of interest. 19. Limit on produce marketing, loan enhanced from 5 lacs to 10 lacs

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R. The enhancement of limit has been made to further improve credit delivering to the priority sector, especially to agriculture and help farmers in marketing their products. 20. Crop loans are converted in to medium term loans when annawari/sukha/floodarea is declared by the appropriate authority in the district for reason of natural calamities. R. It is a rehabilitation facility to distress farmers affected by natural calamities. The facility of conversion enables the farmers to avail further loan facility from the Bank and to continue their agricultural operations. -to provide sufficient cushion to the farmers for repayment in extended years 21. A farmer who is being financed for purchase of tractor should be persuaded to avail of crop loan facility also. R. To avoid borrowers approaching the money lenders to get finance for cultivation expenses, there by reducing the cost of funds to cultivators and to discourage multiple financing. -Sufficient surplus is generated from cultivating the land for regular repayment of instalments of Agricultural Term loans. 22. In case of loans for allied AGRL activities interest should be charged at quarterly/monthly intervals. R.1. As cash inflow is fairly regularly spread throughout the year in case of allied Agricultural activities. 2. To increase the returns on our investments keeping in view of fluidity with borrowers. 23. Inspection of the farm of the farmer-borrower should be made by the Branch Manager/Field Officer. R. To ensure that the Banks interests are fully protected at all times. This is also as per RBI guidelines. 24. In respect of agricultural accounts, photographs of the borrowers to be affixed in the control card are compulsory.

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R. Since in agricultural advances involve large number of accounts and to make the supervision an effective one, photographs are required. 25. Gestation period is given in respect of term loans R. In respect of term loans, a certain period is required for the completion of the project to generate enough surpluses to repay the dues. Hence the time lag is known as gestation period (or) start up period. 26. Preferably, agriculture term loans should be covered under NABARD refinance R. It is the cheap source of funds for the redeployment, Interest spread on refinance funds lent is substantially high and also there are no statutory requirements on the refinance amount 27. Crop loans are disbursed in stages and not in lump sum R. To ensure end use of funds and eliminate the propensity of the farmer to divert the funds for unproductive purpose. 28. Inspection of agricultural advances should be more farmers oriented rather than farm-oriented. R. In a given local condition, farm lands and crops are very similar and mere farm oriented inspection is not very purposeful. -It is more useful to be in touch with individual farmers in order to understand their problems, credit requirements etc., as this will also ensure better supervision, follow-up, recovery and revivals. 29. It has been decided to include additional clause xi a after clause xi in document AB1. R. As per legal advice such an addition would empower the Bank to enforce the security and to resort to legal action on the happening of any of the specified as mentioned with said document, without waiting for default in repayment of the first installment.

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30. It is necessary to have a full range of tractor attachments and trailing equipments R. Because economy of tractor operations depends upon the range of services it is put to use. To use the tractor for all types of Agricultural operations 31. Compounding of interest on annual rests is applicable to long-duration crops only. R. - 1) A sort of relief to the borrower as the asset is not generating income throughout the year. This is also as per RBI directives and as per Supreme Court judgement (in the case of Corporation Bank v/s D.S. Gowda) 32. Only BIS marked agricultural machinery is to be purchased. R. BIS mark on the product is an assurance that the product has been produced and tested to meet the requirements of relevant Indian Standard Specifications. This will help protection of the interest of farmers/bank. 33. The details of tractor/implements purchased should be obtained on the supplementary hypothecation letter signed by the borrower and the guarantor. R. As the machinery will be purchased subsequent to execution of documents and any addition in the security documents subsequent to its execution by executants amounts to a material alteration & may invalidate it. 34. The supplementary hypothecation letter need not be obtained in case of purchase of second hand tractors. R. As the requisite particulars are available at the time of execution of documents itself, no need to obtain supplementary hypothecation letter. 35. All the advances sanctioned to self-help groups irrespective of line of activity should be classified under agriculture. R. As the purpose of loan is not asked by the Bank at any stage and the members, to whom the loan amount is ultimately disbursed by the SHGs, use them for such diverse purposes as consumption, agricultural, small business, repayment of old loans etc.The members of SHG generally belong to rural areas & are agrl laborers.

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36. 40 A 'Rural and Agri. Business satellite centre' at one SBLC in each circle has been established. R- To meet training requirement of all the officials/employees engaged in agri. and rural business in the circle. To conduct circle specific training programmes depending upon area activities. This is also with a view to provide training inputs to Business Correspondence, Business Facilitators, farmers etc. 37. It has been decided to dispense with the requirement of No Due Certificate up to Rs.50000/- to farmers. This has been done with a view to mitigate the hardships to small and marginal farmers and share-croppers. Instead of NDC, self declaration of this effect is obtained from the borrower.

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