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IIBF BANK PROMOTION EXAM | AGRICULTURAL LOAN SCHEMES

BANK PROMOTION EXAM | AGRICULTURAL LOAN SCHEMES | IMPORTANT TOPICS

Some of the important schemes or loans that are available to the farmers to help them finance their agricultural activities or farming will be discussed in this article. The loans will also be discussed that are available with different banks. The Agriculture Loans form part of the syllabus of the Bank Promotion Exams for the 2022 Exams. 

The topic although falls under the unit ‘Bank specific schemes and products’ but it covers a large portion of the unit.

AGRICULTURE LOAN SCHEMES IN INDIA

Seeing as agriculture is the backbone of the Indian economy, the financial institutions offer monetary aid to farmers all across the country to enhance or play their part in the progress of agriculture. These loans are available for different kinds of activities related to farming. The loans can be or are available to fulfill the different needs of the farmers.

These are not only available to farmers but also to the people engaged in the activities of other agriculture-related sectors such as horticulture, animal husbandry, silk farming, aquaculture, apiculture & floriculture, etc.

Types of Agricultural Loans in India: A farmer can get a loan to meet the following requirements:

  • To run the day to day operations
  • To Purchase land
  • Buying farm machinery such as harvesters & tractors etc.
  • For the purpose of storage
  • Loans related to product marketing
  • To expand their activities

The financial aids can also be in form of grants & subsidies as well, which usually are proposed to protect the farmer in cases of crop damage or loss of crops.

National Bank for Agriculture and Rural Development (NABARD)

Although Indian Banks offer many agricultural products but the credit to boost rural economy mainly goes to NABARD when it was set up in 12 July 1982. After that the other banks also had actively started offering loan products for agriculture.

Since then, NABARD has come up with several innovative schemes and been working with the Government of India (GOI) to boost agriculture sector & to aid the farmers throughout the country. NABARD’s most notable scheme has been the Kisan Credit Card (KCC). Some of the details related to it are given below:

 Important Topic:- BANK PROMOTION EXAM DATE 2022, SYLLABUS AND STUDY MATERIAL

KISAN CREDIT CARD SCHEME

The Kisan Credit Card, launched back in 1998, by providing monetary support to farmers, which comes with various features and benefits. The quantum of the loan depends on several factors such as cost of cultivation, farm maintenance cost, etc.

This scheme has been especially beneficial for those farmers who were not aware of the banking practices & it has been made to protect farmers from harsh & informal creditors, to help them avoiding massive debts.

 

Eligibility: Any Farmer can apply for KCC

Loan Amount: Under the KCC scheme, farmers can borrow funds at 7% p.a. for amounts up to Rs. 3,00,000.00

Withdrawal of Finds: With the help pf the KCC card, famers can withdraw funds for crop production & domestic requirements.

Applying for the Kisan Credit Card: The application process of KCC is simple & hassle-free with minimal documentation. KCC also offers insurance coverage of crops, along with subsidies on interest payments. 

Approval: The KCC is linked to the farmer’s savings a/c & thus, all transactions are done under a single a/c. And any credit balance in the KCC also earns interest. 

Read Also:- BANK PROMOTION EXAMS STUDY MATERIAL IN HINDI ENGLISH

OTHER SIMILAR TYPES OF AGRICULTURAL LOAN SCHEMES

The NABARD has helped greatly in developing some other schemes, that targets specific sectors. Some are listed below:

 

Scheme Details
Dairy Entrepreneurship Development Scheme: Meant to promote the dairy sector by setting up modernized dairy farms, promoting calf rearing, provide infrastructure, upgrading logistical operations so as to improve the product on a commercial scale & generate self-employment.
Rural Godowns: It helps farmers throughout the country by providing them with godowns which will improve their holding capacity drastically and they will be able to sell their produce at fair rates, rather than selling them under distress. 

This will also ensure a nationalised warehouse system as well as will make the marketing of agricultural produce simpler.

Loan Against Warehouse Receipts: This is a foolproof way to prevent distress sales as when farmers need funds, post-harvest, all they need to do is store their produce in a Warehousing Development and Regulatory Authority (WDRA) accredited warehouse, they will be issued receipts. 

That receipt will contain details: quality and quantity of the produce, & could be used to get credit from banks, up to 70% of the collateral value.

Solar Schemes: To reduce dependence on grid power, this scheme promotes the use of solar equipment. It is to replace diesel pumps with solar ones that have operating costs & are environment-friendly.

 

AGRICULTURAL LOANS IN INDIA OFFERED BY DIFFERENT BANKS

Coming to the public-sector banks in India, there are several leading financial institutions who are known for their exceptional credit services in agriculture-related sectors. Some of these banks are mentioned below.

 

STATE BANK OF INDIA AGRICULTURAL LOANS
Agricultural Products:

Kisan Credit Card, 

Gold loan for crop production & 

Multi-purpose gold loan

Loan Against Warehouse Receipts

Debt Swapping Scheme

Purpose: 

to purchase combine harvesters, tractors and install drip irrigation and for activities related to dairy, poultry or fisheries can also be availed

To clear their dues against loans taken from non-institutional lenders like loan sharks, money lenders etc.

HDFC BANK AGRICULTURAL LOANS
A no. of loans are available for the installation of orchards & plantations to promote commercial horticulture and production of field crops. It also offers warehouse receipt financing to all farmers & small traders.
ALLAHABAD BANK AGRICULTURAL LOANS
Warehouse receipt financing

Debt swapping scheme

Construction of rural godown 

Kisan Credit Card under Akshay Krishi Scheme

Allahabad Bank Potato Growers Credit Card Scheme

Whose objective is to provide sufficient financial support in a timely manner &

to help meet the cultivation requirements.

BANK OF BARODA AGRICULTURAL LOANS
One can take loans to purchase tractors & heavy machinery that is needed for day-to-day operations as well as offer working capital and funds required to either set up units, or to run units that are occupied with dairy, poultry, pig farms, sericulture, rearing of sheep & goat, etc.

4-wheeler loans are also available to the farmers upto Rs. 15,00,000.00

PUNJAB NATIONAL BANK AGRICULTURAL LOANS
Pradhan Mantri Fasal Bima Yojana (warehouse receipt financing with insurance coverage)

Kisan Credit Card 

Debt swapping

A number of loans are available to establish biogas units, develop wastelands, set-up minor irrigation apparatus, etc as well as for apiculture (beekeeping).
AXIS BANK AGRICULTURAL LOANS
Schemes:

Gold loans

Kisan Credit Card

Tractor loans

Warehouse receipt financing

Loans for developing rural godowns

Contract Farming

Under Contract Farming loan agreements are stipulated to farmers and corporates. The loan amount gets distributed by the lender bank instantly for production and supply of the produce, and all of it is governed by the Fair Practices Lending Code.

 

So, the above is a little brief over the agricultural loans that are available with the leading banks. 

 

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