lnstruction Circular No. : 1004 File No. : 30 ALL OFFICES CENTRAL OFFICE, CHANDER MUKHI NARIMAN POINT, MUMBAI-4OOO2 1 PRIORITY SECTOR RURAL DEVELOPMENT DEPARTMENT Date z 07.11.2012 Dept. Running No. : 70 Reg : Loans for Purchase of Estates growing Traditional Plantation Crops A need was felt to formulate a scheme to provide loans to the farming communify for purchase of estates growing traditional plantation crops. Accordingly, based on the suggestions of the working group formulated by the Reserve bank of India for this purpose, our bank has approved The Scheme as under: The Scheme for Loans for Purchase of Estates growing Traditional Plantation Crops Purpose To purchase estates growing traditional plantation crops viz. coffee, tea, rubber and cardamom, cashew, pepper, coconut and other perennial orchard crops. Facilitv Eligibility Criteria Term Loan 1. Existing customers having satisfactory past dealings with the bank. 2. The purchaser should hive yielding estates and should be in a position to rejuvenate the Estate proposed to be purchased. 3. The purchaser should be experienced in the line, financially sound and should be in a position to bring in margin and service the debt. 4. The intending buyer should qualify the respective State Government norms of being an agriculturist / satisfy the income criteria stipulated by the State Covernment. 5. The estate should preferably be a neglected one. The estate should have potential for realizing higher yields. The Estate should have the potential to absorb substantial credit for developmental activities. 6. The total land holding including the land to be acquired should be within the {' t- land ceiling norms of respective State. 7. Farmers who have defaulted (not due to natural calamity) to any financial institution/society will not be eligible for loan under the scheme. L
Quantum of Loan Margin Least of - (i) Market Value assessed by the branch (ii) Guidance Value/Circle rate fixed by the State (iii) Purchase consideration including the stamp duty and registration charges and (iv) t2.00 crores For the purpose of assessing value ofthe land to be purchased, price indicated may be cross checked with the last five years average registration value available with the registrar/ sub registrar of the area and a view is taken by the bank for fixing the quantum offinance. The maximum amount of loan that can be sanctioned under the scheme is (2.00 crores. Loans of more than (2.00 crores can be considered by the next higher authority, not below the rank of Regional Manager, on case to case basis. 50o/o on purchase consideration or market value of estate accepted by the branch, whichever is lower. However, in deserving cases, the same may be relaxed up to 40% by the next higher authority on case to case basis with proper justification. The cost of registration / stamp duty may be considered in the project cost. Security Primary Security : 1. Mortgage of property to be purchased. 2. Hypothecation of Plantation crops raised on the land/estate. Rate of Interest Penal Interest Repayment Period Documents to be produced by the applicant La Collateral Security : Collateral security by way of mortgage of existing landed properties / including preferably residential property is to be obtained. In any case, the total value of security should not be less than 200oA ofthe loan amount. As applicable for direct agricultural advances. No Penal interest shall be charged for loans upto Rs. 25,0001-. In case of loans above Rs. 25,000/- penal interest to be recovered as per norms. The loan should normally be repayable within 7 to 9 years including moratorium period, if any. In specific cases, it may be extended up to 15 years depending on the status of the Estate and Rejuvenation period required. o Copies of land records regarding land owned and to be purchased, certified by the concerned Revenue authorities. o No due certificate from Co-operative Credit Society/Commodity Boards/Financial Institutions. In case of loans of up to Rs. 1 lakh this can be waived provided the sanctioning authority is satisfied that the applicant does not have liability with society/ financial institutions. o Documents of title and other relevant documents to establish the right over presently held landed property as well as lands to be purchased is to be produced.. Copy of sale agreement if entered into or offer letter by the vendor. o Original Title Deeds held by the seller should also be obtained and kept along with EM documents.. Crop history of the Estate to be purchased as well as existing Estates. o Valuation report of the Estate to be purchased from the Bank's Panel valuer.
TEV Report Applications /Documentation Pre-sanction visits Disbursement Post sanction monitoring Processing charges For proposals up to Rs.5.00 crores, sanctioning authority should ensure viability of the proposal and proper recording to be made in the process note to that effect. In case of proposals of more than Rs.5.00 crores TEV report from a reputed outside agency on Bank's Approved panel be obtained and the same should be studied independently before making any commitment. Prescribed Application Form to be obtained from the borrower. Prescribed loan documents for Term Loan to be obtained. In case of Loans of Rs.1.00 crores and above, the documents should be got vetted by law officer/penal advocate as stipulated in the loan policy. Branch Manager/ Field Officer should visit the farm to assess the technical feasibility and economic viability of the proposal. The irop history of the Estates may be recorded - at least for 4-5 years and analyzed and confirm the potential of re-iuvenation.. The loan is to be disbursed directly to the vendor after collecting the margin money or after ascertaining the advance paid with documentary proof. EM should be created immediately on receipt of the title deeds.. Before disbursing the loan, Legal Scrutiny Report (LSR) from the Bank's panel advocate on the property to be mortgaged is to be obtained and the lands should have clear and marketable title. r The LSR, among other things, should specify - Whether the borrower qualifies for purchase of land as per the provision of the Land Reforms Act, etc. prevailing in the State. r The draft Sale Deed should be got approved by the panel advocate before disbursing the loan. o Receipt from the vendor for having received'the consideration / saie proceeds in full should be kept along with the loan papers. Follow up visit to be undertaken to find out status of the activity of the borrower and to give technical guidance to farmers and to remind the borrower of repayment in case of default. Half yearly visits should be undertaken by the branch in respect of regular accounts and report should be kept on record. As per guidelines issued by central office from time to time. The present rate is as under: Rs.120/- per lakh or part thereof (0.12%o) subject to maximum of Rs.20,000/- Inspection charges As per guidelines issued by."ttluljffigg!9, time to time. The R". tr.p rresent rates are as under: Other aspects More than {5 lakh & upto {50 lakhs I <500 l'l I More than (50 lakh <1000 ffiitatetheborrowerwithcreditrequirementsunderrevised KCCs/Development/ farm investments on the lands proposed to be purchased. 4= 6
Sanctioning Authority Under Priority Sector - Direct Agriculture. However, The matter of classification of such loans under Priority Sector is being examined by RBI and the status of priority may change. As per loan policy of the Bank applicable from time to time. The present delegated powers are as under: " A. Individuals Nature offacility { in lacs Total lending power (flunded & Nonfunded B. Credit approval Committees HLCC. Nature of facility Total lending power (funded &. Non-funded 1(CGiW GM at CO Credit Rating As per existing guideline, according to type of classification, It will be as per IRAC norns of RBI, applicable for agricultural term loans. Other Terms & Conditions L6 a a KYC norms should be complied with; Authority letter to be obtained from the borrower to collect the Title Deeds of the estate on his behalf from the office of the sub registrar. Insurance of Plantation crop grown on the estate and the collateral security to be obtained. Since the Scheme is for purchase of plantation growing estates, quantum of loan will be substantial. Further it is being introduced for the first time. It is therefore, proposed to implement the scheme through identified branches by respective regional offi ces. The matter of classification of advance under the scheme into priority/non priority sector is being examined by Reserve Bank of India. Instructions in this regard will be issued on receipt of clarification from RBI.
The credit facility under the scheme will be beneficial for the farming community desirous of purchasing estates growing traditional plantation crops. As purchase of such estates involves substantial investment, big ticket advances can be considered thereby, giving a boost to our agricultural advances. The scheme will be applicable with immediate effect. Branches are advised to market this product aggressively and canvass maximum amount of business under the scheme so that the advances under agricultural sector is enhanced. 4,! DY. GENERAL MANAGER: PS 6