On Debit Balance : As advised by Head Office from time to time
On Credit Balance : Rate of interest payable will be as per Savings
Bank interest rate and follow the Savings Bank
Rules except opening a separate account.
Security
There will be common documentation though the sub-limits are maintained as separate accounts for the convenience of monitoring.
Upto Rs.50,000/= : D. P. Note Hypothecation of standing crops
Above Rs.50,000/= : D. P. Note Hypothecation of standing crops Mortgage of land / Collateral security
Note:
In case the value of land mortgaged is adequate, no other security should be obtained.
For finance against Government warehouse receipts, mortgage may be waived.
Waiver of mortgage of land in deserving cases may be considered as per security norms.
The RBI norms on security should be strictly adhered to.
Common Documents:
Demand Promissory Note.
Deed of Composite Hypothecation Agreement (CHA-1).
Letter of Authority (AG-15).
Charge on land as per Agricultural Credit Act or Equitable mortgage or Legal Mortgage of land (CHA-4).
Letter of Pledge (OD-159).
Pledge of Storage Receipt duly discharged.
Undertaking to repay the advance within 12 months or on sale of produce.
Bank’s lien to be notified to the storage unit.
Undertaking from the godown / cold storage owners not to deliver the goods without production of the pledged storage receipt.
L-515.
L-516 (if required).
Note:
Documents mentioned under (e) to (i) above are applicable only if sub-limit against storage receipt is sanctioned.
In case produce marketing limit is extended against the produce stored in the premises of the farmer, then hypothecation deed (CHA-1) should suffice to cover hypothecation charge on the produce stored.
Disbursement
Upto Rs.25,000/= may be disbursed in cash to the borrower.
Above Rs.25,000/= may be disbursed through input supplier/s or against bills / receipts or may be waived at the discretion of the manager / sanctioning authority. Short term working capital requirements may be disbursed in cash.
Portion of finance against storage receipts / produce marketing including domestic needs may be disbursed in cash directly to the farmer.
Supervision / Follow-Up
Proper care has to be exercised at the time of selection of the borrower. Pre-sanction inspections should be carried out in all cases. A minimum of one post-sanction inspection of seasonal crops and two in case of multi-season / annual crops should be carried out.
In case of finance against storage receipts / produce marketing, periodical inspections should be carried out to ascertain the condition of the stored produce and to see whether the unit is functioning smoothly.
Inspection at the time of harvesting / marketing of the crop would ensure timely repayment of the credit.
Repayment
Seasonal sub-limits should be adjusted after harvesting / marketing of crops.
While disbursing finance against storage receipts / produce marketing, seasonal sub-limits should be adjusted and only balance amount may be disbursed.
Crop Insurance
Crops financed should be insured as required by law or as covered under various schemes.
Crop Loan portion of the finance should be covered under the RashtriyaKrishi Bam Yojana (RKBY) of the Agriculture Insurance Company of India Ltd. (AIC).
Insurance premium should be debited to the relative loan account and claims if any be credited to the beneficiary’s account promptly.
