Provision of short term credit limits to State Co-operative Banks for financing Marketing of Crops – Policy for the Year 2006-07
Eligibility and Rate of Interest
Only SCBs/DCCBs, which are eligible for refinance assistance from NABARD for financing ST (SAO), will be eligible for refinance assistance for marketing of crops. Eligibility norms for SCBs/DCCBs for availing refinance under the above Scheme will be same as applicable in case of ST (SAO) refinance.
The rate of interest on refinance will be at 9.50% p.a. or such other rates as may be fixed by NABARD from time to time.
Objectives
Helping growers afford reasonable opportunities to obtain remunerative price for their produce by enabling them to hold on to their produce for the time being.
Facilitating recovery of production loans out of the loans provided for marketing of crops against pledge of agricultural produce and/or from purchase price payable for agricultural produce.
Scope
Outright purchase of agricultural produce of cultivators (both members and non-members of PACS) by processing/processing-cum/marketing/marketing societies.
Crops may include food grain crops, cash crops, plantation and horticultural crops.
The benefit of the Scheme for financing marketing of crops with refinance support from NABARD is intended for only the bonafide cultivators, both members of PACS and non-members. Banks should ensure that traders/businessmen etc., are not financed under the Scheme.
Quantum of Credit
Not exceeding 75% of value of actual produce pledged subject to a ceiling of Rupees ten lakh per cultivator members.
Operative Period and Duration of Credit
Banks may ensure that the loans for marketing crops against pledge of agricultural produce are sanctioned before or during the marketing season. However, the credit limits sanctioned by NABARD shall be operative for a financial year (April-March) and the same will be repayable within a maximum period of 12 months.
