Financial Inclusion, Priority Sector & Agriculture Finance
Priority Sector – New guidelines HOBC 113/181 dated 09/01/2020
Broad Categories: Agriculture- Comprises Farm credit, Non-Farm Credit, & Agr. Infrastructure. No distinction between Direct & Indirect agriculture now. No separate targets either. o Farm Credit: Includes all finances for farm activities [all ST/ MT/ LT loans]. To include, inter alia, Loans to distressed/indebted farmers, Loans to SF/MF for purchase of Agri. Land & Loans to Corporates/Societies, etc. up to Rs.2 cr., Loan to farmers upto Rs.50 lakhs against pledge of warehouse receipt, repayable in 12 months. o Agriculture Ancillary activities include Finances to Co-op societies for marketing of produce [up to Rs.5 cr.], Agro-clinics Agri-Business Centers up to Rs.20 lakhs (in deserving cases up to Rs.25 lakhs), Food & Agro processing [up to Rs.100 Cr. per borrower], PACs, LAMPS, FSS, MFI & NBFCs for onward lending to farmers, etc. & RIDF contributions o Agri. Infrastructure includes Godowns, Cold storage, chain of cold storages etc., Soil conservation & watershed development, Tissue culture/Seed production, Bio-technology, Vermi compost, etc. [ Max. Rs.100 Cr. per borrower] o Small and Marginal farmer is defined as:1) marginal farmer is the farmer having land holding 1 hectare, small farmer is the farmer having land holding above 1 ha and upto 2 hectares, 2) landless agriculture labors, tenant farmers, oral lessee, share cropper whose share of landholding is the S & M farmer definition, 3) SHG & JLG if bank is maintaining disaggregated data of such loans, 4) loan to FPC & farmers cooperatives where membership of S & M farmers is more than 75% and whose land holding share is not less than 75% of total land holding. Note: - Domestic banks are directed to ensure that overall lending to non- corporate farmers doesn’t fall below the system-wide average of the last 3 years achievement. All banks have to achieve system-wide average as given above, for the current year i.e. 2019-20, it is 12.11%. All efforts should be taken to reach the level of 13.5% direct lending to the beneficiaries who earlier constituted the direct agriculture sector. MSME- Medium Enterprises [new addn.]. Investment in P&M remains unchanged i.e. @ 25 lac, 5 cr, & 10 cr for Micro, Small, & Medium Entp. [Manufacturing] & @ 10 lac, 2 cr, & 5 cr for MSME [Service]. Earlier sub-category & sub-targets under Micro sector dispensed with Medium Entps. To enjoy MSME status up to 3 years even after they outgrow beyond MSME limitations due to growth in business. MSME includes factoring transactions, where assignor is a micro, small or medium enterprise. Factoring transactions taking place through the Trade Receivables Discounting system will be classified under priority sector.
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All loans to units of KVI sector are eligible for classification in subsector of 7.5% in micro enterprises. Inter Bank Participation Certificates bought by the bank on risk sharing basis are eligible for classification under respective categories of priority sector, provided the underlying assets are eligible to be categorized under the respective categories of priority sector and bank fulfil the RBI guidelines on IBPC. The outstanding priority sector lending certificates (PSLC) bought by banks will be eligible for classification under respective categories of priority sector provided the assets are originated by banks are eligible to be classified as priority sector advances and fulfil the RBI guidelines on priority sector lending certificates. All PSLC will expire on 31st March i.e. on closing of the FY. Loan to cooperatives of producers in decentralised sector such as artisans, village and cottage industries. Credit outstanding under GCC, ACC, LUC, Swarojgar Credit Card, Weaver’s Card etc. are covered in MSME. Loan to NBFC / MFI for onward lending to MSME units shall be covered in MSME. PMJDY accounts with OD facilities up to Rs.10,000/- having age limit between 18 to 65 years are covered under MSME and the OD facility will be covered in Micro enterprises. No conditions will be attached for OD facility up to Rs.2,000/- in PMJDY account. Shortfall in achieving micro enterprises target will be contributed with SIDBI and Mudra Bank. Housing Loan - Loan up Rs.35 lac in Metro, with project cost up to Rs.45 lac; Loan up to Rs.25 lac, with PC up to Rs.30 lac [other areas]. Loan for repair to damaged dwelling units up to Rs.5 lakhs in urban areas and up to Rs.2 lakhs in rural areas are covered in PS. Bank loan to any Govt. Agency for construction of dwelling units or slum clearance up to Rs.10 lakhs are covered in PS. Loan sanctioned by banks for housing projects exclusively for EWS & LIG under PMAY are covered in PS. Shortfall in achieving of target to be contributed with NHB. Export Credit- YOY incremental growth up to 2% of ANBC or CEOBE (Credit Equivalent amount of Off-balance sheet exposure) for PSBs and Foreign banks having more than 20 branches. 32% of ANBC or CEOBE for foreign banks with less than 20 branches. Education- Education loan up to Rs.10 lakhs including vocational courses irrespective of the sanctioned amount. Social Infrastructure [new addn.]- Includes Schools, Hospitals/ Health units, Sanitation, etc. Finances under this head up to Rs. 5 cr per borrower is under PSA. Renewable Energy [new addn.]- Includes finances up to Rs 15 cr per borrower for solar generators, wind mills, micro-hydel, village electrification, etc. However, max. limit per individual = Rs. 10 lac Others- o Loan @ Rs. 50000/= [max] to Individuals/SHG/JLG whose income does not exceed Rs. 1 lac [in Rural area] & Rs. 1.6 lac [ Non-rural] Vijeta – March 2020 Page | 56
o Loan @ max Rs. 1 lac to non-farmers for repayment of debts o Loans to SC/ST/ State organizations for inputs & marketing. o Loan to NBFC/ MFI for purposes other than onward lending to agriculture or MSME borrowers.
Targets : o For Domestic Scheduled Commercial Banks and foreign banks with 20 or more branches o PSA = 40% of ANBC or CEOBE, whichever higher o Agriculture = 18% [No targets for Indirect Agr.] of ANBC or CEOBE, whichever higher o Agr. Sub-target = 8% of ANBC or CEOBE, whichever higher for SF/MF o Micro = 7.5% of ANBC or CEOBE, whichever higher o Weaker section = 10 % of ANBC or CEOBE, whichever higher.
For foreign banks with less than 20 brs. o 40% of ANBC or CEOBE, whichever higher by March 2020. No agriculture, Micro enterprises and Advances to weaker Section targets for this group.
Abbreviations ANBC = Adjusted net Bank Credit CEOBE = Credit equivalent of off-balance sheet items ANBC = o Net Credit [Bank credit minus Bills rediscounted with RBI] o (+) Non-SLR bonds o (-) Long Term Bonds in Infrastructure investments etc o (-) Advs. Against FCNR & NRE [ineligible for CRR & SLR] o (-)Investments made in the Recapitalization Bonds
Pradhan Mantri Jan-Dhan Yojana – (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking/ Savings & Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner. The highlights are- Account can be opened in any bank branch or Business Correspondent (Bank Mitra) outlet. BSBDA Account are opened under this with features- o There is no requirement of minimum balance. o The services available include deposit and withdrawal of cash at bank branch as well as ATMs; receipt/credit of money through electronic payment channels or by means of collection/deposit of cheques. o Rupay debit card can be issued to the account holder after the age of 18 years. o Facility of ATM card or ATM-cum-Debit card. These facilities are to be provided without any extra cost.
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o Any individual above the age of 10 years can open BSBDA Account. Illiterate customers can be issued RuPay Card, however, Branch Manager will have to advise all the related risks to the illiterate account-holder at the time of issuance of RuPay Card. To get benefit of Accidental Insurance Cover, RuPay Debit Card must be used at least once in 90 days. If someone has two or more accounts and two or more RuPay Debit Cards, accidental insurance cover is available in only one account /card. A person who is already having a bank account with any bank NEED NOT to open a separate account under PMJDY. He/she will just have to get issued a RuPay Card in his existing account to get benefit of insurance. Credit facility can be extended in the existing account if it is being operated satisfactorily. Overdraft facility up to Rs.10000/- will be available to one account holder of PMJDY per household after 6 months of satisfactory conduct of the account. To avoid duplication Aadhaar number will also be required. Accidental Insurance Cover is Rs.2.00 lac and no premium is charged to the beneficiary -- NPCI will pay the premium. Accidental Insurance cover of Rs.2.00 lac will be available to all accountholders. However, overdraft facility upto Rs.10000/- will be available to only one person in the family (preferably lady of the house). Documents required to open an account under Pradhan Mantri Jan-Dhan Yojana- o If Aadhaar Card/Aadhaar Number is available then no other documents is required. If address has changed, then a self- certification of current address is sufficient. o If Aadhaar Card is not available, then any one of the following Officially Valid Documents (OVD) is required: Voter ID Card, Driving Licence, Passport, NREGA Card NPR certificate. If these documents also contain your address, it can serve both as "Proof of Identity and Address". o If a person does not have any of the "officially valid documents" mentioned above, but it is categorized as ‘low risk' by the banks, then he/she can open a bank account by submitting any one of the following documents: . Identity Card with applicant's photograph issued by Central/State Government Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks and Public Financial Institutions; . Letter issued by a gazette officer, with a duly attested photograph of the person. In PMJDY accounts are being opened with Zero balance. However, if the account-holder wishes to get cheque book, he/she will have to fulfil minimum balance and KYC criteria of the bank. Reserve Bank of India (RBI) vides its Press Release dated 26.08.2014 has clarified as under: "Those persons who do not have any of the ‘officially valid documents' can open "Small Accounts" with banks. A "Small Account"
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can be opened on the basis of a self-attested photograph and putting his/her signatures or thumb print in the presence of officials of the bank. Such accounts have limitations regarding the aggregate credits (not more than Rupees one lac in a FY), aggregate withdrawals (not more than Rupees ten thousand in a month) and balance in the accounts (not more than Rupees fifty thousand at any point of time). These accounts would be valid normally for a period of twelve months. Thereafter, such accounts would be allowed to continue for a further period of twelve more months, if the account-holder provides a document showing that he/she has applied for any of the Officially Valid Document, within 12 months of opening the small account. Interest will be charged as per HO guidelines being issued time to time. All banks participating in PMJDY are on CBS (Core Banking Solution) platform and the account can easily be transferred to any branch of the bank in any city/town as per the request of the account-holder.
Business Correspondents & Business Facilitators Model-A tool for Financial Inclusion • Focus to rural and farm house holds, to explore innovations using agency model, Govt. intends to promote MFIs Internal group “Rural Credit & MF with Sri. H. R. Khan” Suggested BC & BF model Nonfinancial & Financial service as pass through agents by leveraging MFI/NGOs • RBI instructions during Jan 2006 to utilize the services of NGOs, MFIs & other civil society organizations as intermediaries i.e., BC & BF • Role of BFs- identification of borrowers, collection & preliminary processing of loan applications, creating awareness about savings & other products, advice on managing money & debt counselling. Processing & submission of application to banks. Promoting & nurturing SHGs/JLGs, post sanction monitoring &follow up & recovery. • BFs-eligibility-NGOs, FCs, Co-ops, community based organizations, IT enabled rural outlets of corporates, post offices, insurance agents, well- functioning panchayats, village knowledge centres, Agri. clinics, KVKs, KVIC/KVIB units - based on comfort level of banks • BCs- in addition to BF, disbursal of small value credit, recovery, collection of small value credit, sale of micro ins., mutual funds, pension products, receipt & delivery of various instruments. Activities undertaken by BCs are to be within the normal course of the bank’s banking business, but conducted through the permitted entities at places other than the bank premises. • BCs-eligibility-NGO/MFIs set up under Societies/Trust Act: Post offices, retired bank employees, ex-service men, retired govt. employees. Banks have been permitted to engage the following entities as BCs: • Individual kirana/medical/fair price shop owners • Individual Public Call Office(PCO) operators • Agents of Small Savings Schemes of Government of India/Insurance Companies • Individuals who own Petrol Pumps • Retired teachers and
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• Authorized functionaries of well-run Self Help Groups(SHGs) linked to banks, NBFCs • On a review and with a view to providing more flexibility to banks, it has been decided to permit banks to engage any individual, including those operating Common Service Centres (CSCs) as BC, subject to banks’ comfort level and their carrying out suitable due diligence as also instituting additional safeguards as may be considered appropriate to minimize the agency risks. • Working group to review the BC model on Payment of commission, Capacity building of BC/BF, NABARD support for IIBF course, Risk mitigation-Reputation, Legal, operational risks, Technology based solutions for managing risks, Suitable limits on cash holding by intermediaries, limits on individual customer payments & receipts. • Transactions are accounted for & reflected in the bank’s book by end of the day or next working day. All the agreements/contracts with the customer shall specify that the banks are responsible to the customer for acts of omission & commission of BC/BF. • Grievance redressal-names & contact no.s : Time frame for response not within 60 days-provision to approach Banking Ombudsman. • Oversight of operations of BC-place of operation of BC and the base branch-not to exceed 30 km in rural, semi urban, urban-in metro-5 km. It can be decided by DCC and SLBC. While appointment of sub agents due diligence should be done on BC/BF appointment of sub agents- due diligence -criteria for BC/BF to follow- individuals as BC should not appoint sub agents. Banks to closely monitor. • Regulatory issues: settlement within the prescribed time limit, high delivery costs. There are multiple risks: credit, operational, legal, liquidity, reputational. • Road Map for the future: Ensuring viability of BC by paying minimum amount, this is again fixed by the committee. BCs to be used for full range of services.
Joint Liability Group • To augment flow of credit to farmers, especially small, marginal, tenant farmers, oral lessees, share croppers/ individuals taking up farm activities. To serve as collateral substitute for loans to be provided to the target group. To build mutual trust and confidence between bank and the target group. To minimize the risks in the loan portfolio for the banks through group approach, cluster approach, peer education and credit discipline. To provide food security to vulnerable section by enhanced agriculture production, productivity and livelihood promotion through JLG Mechanism. Farmers / JLGs who have cultivable fertile land and are supplying the produce to corporate/agent and have also been recommended by that corporate / agent. Adequate proof of land holding will have to be obtained for facility. • Model I Financing individual members of JLG, Model II Financing JLG as a group • Should have been recommended by the corporate/agent having cultivable fertile land and are supplying produce to corporate/agent.
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Undertaking from Farmers/JLG members to be obtained stating that no loan is availed from other FI/ Bank. Members should belong to similar socio-economic status, background and environment carrying out farming and Allied activities and who agree to function as a joint liability group. This way the groups would be homogeneous and organized by likeminded farmers/Individuals and develop mutual trust and respect. The members should be residing in the same village/ area/ neighbourhood and should know and trust each other well enough to take up joint liability for group/individual Loans. Members who have defaulted to any other formal financial Institution, in the past, are debarred from the Group Membership. More than one person from the same family should not be included in the same JLG.The repayments can be made either directly by the JLG or the corporate / the society who is standing as guarantor, shall send to the bank the entire proceeds payable to the farmers / JLGs. The bank will make payment to the farmers after deducting the loan dues. In the case of pre harvest finance hypothecation of crop and in the case of post- harvest finance according to nature of facility viz: receivables etc. In the case of term loan facility combined hypothecation agreement (Hypothecation of crop machinery etc.) For pledge loan – pledge of ware house receipt. KYC documents as per Banks extant guideline to be obtained and verified of all the members of the JLG. Ensuring KYC compliance and proper end use of fund is the sole responsibility of the branch. Hence, each branch must satisfy itself of the reliability of the corporate / society, who is standing as guarantor. The branch will conduct 100% verification of the assisted farmers and their farm land. • Scoring as per the scoring model tools communicated by Central Office, Risk Management Dept should be carried out.
SELF HELP GROUP - NABARD
Self Help Group is a homogeneous group of rural poor voluntarily formed to save whatever amount they can conveniently save out of their earnings and mutually agree to contribute to a common fund of the group to be lent to the members for meeting their productive and emergent credit needs. A pilot project for linking SHGs so as to facilitate smoother and meaningful banking facilities to poor was launched by NABARD in February 1992. RBI advised commercial banks to actively participate in the linkage programme. The objective of SHG are as under:- i) to evolve supplementary credit strategy for reaching rural poor. ii) to build mutual trust and confidence between banks and the rural poor. iii) to encourage banking activities; both thrift as well as credit.
Salient Points on Self Help Group
1) Lending through SHGs reduces transaction costs, and aids in timely recycling of funds, saving manpower. It is, therefore, in the interest of rural and semi-urban branches to utilise SHGs for delivery of credit to rural poor.
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2) SHG is a voluntary association of people formed to attain common goals on collective basis, at the village level. 3) However, emergence of SHGs as facilitators for delivering rural credit to the poorest of society is a new concept. 4) Functions of SHG: a) Organize meetings of group members. b) Create group managed funds through savings (thrift) c) Give loans to members (credit) d) Keep records e) Provide a forum for poor people to reap the benefits of mutual trust/group empowerment. 5) Four stages are envisaged in the functioning of SHG. They are: (a) Forming Stage (people start feeling the need to come together); (b) Storming stage (conflicts get resolved and leadership emerges); (c) Norming stage (cohesive unit emerges) and (d) Performing stage (the group starts performing the functions of thrift and credit). 6) Factors leading to emergence of SHGs (a) Felt needs; (b) Homogeneity; (c) Solidarity; (d) Democratic participation; (e) Leadership; (f) Benefits of collective action; (g) Transparency of operations. 7) S. K. Kalia Working Group (November 1994) observed that lending through SHGs could offer the much needed solution to the twin problems being faced by the banks, viz., poor recovery and high transaction cost in dealing with small borrowal accounts. With SHGs, the managerial and supervisory load at branch can be reduced. The burden of identification, assessing credit needs and supervision will be externalized and reduced, thus reducing transaction cost. SHGs are helpful in tapping small savings (thrift). The group pressure leads to high rate of recovery. 8) The size of the group should be between 10 and 20. May be formal (registered) or informal (unregistered).Size is maintained below 20 to avoid registration formalities. 9) Size of the loan may be up to four times the savings of the group. The SHG should prepare a credit plan and submit it to the branch with loan application. Where the groups are sponsored by VA/NGO, the loan application should be accompanied by the sponsoring letter. The loan will be given after Grading/Rating exercise of the SHG. 10) The SHG is not eligible for linkage if : a) 50% or more members default in savings; b) Less than 30% of the group savings have been used for internal lending; c) The group is in active existence for less than 6 months. 11) The credit limit should be determined on the basis of projected average savings of the group for next three years. However,
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drawing limit to be based on the actual level of group’s internal savings. 12) Purpose of lending by the group to members left to the common wisdom of the group. 13) Productive purpose should be encouraged out of loans from the Bank. 14) The sanctioned loan should be credited to the group account and the authorised representatives (President, Secretary and Treasurer) may jointly draw money. 15) Rate of interest to SHGs: - As advised by H.O time to time a) SHG to members: - As decided by SHG 16) Refinance by NABARD: 100% @ 7.0% p.a. to District Central Cooperative Banks. 17) Repayment of loans by SHG may be within 3 to 5 years. 18) No guarantee or collateral to be insisted on. 19) Margin: Thrift of the group treated as margin. 20) SHGs may open savings accounts and deploy their savings in lending to members before approaching for bank borrowing. 21) Lending to SHGs should form part of mainstream credit operations of the branches. 22) Lending to SHG may be classified as priority sector on the basis of main/predominant activity undertaken by the group out of bank loan. It forms part of credit to weaker sections.
DAY - National Rural Livelihood Mission– Br.Cr.113/74 dated 10/07/2019 The Ministry of Rural Development, Govt. of India launched a new programme National Rural Livelyhood Mission (NRLM), replacing SGSY on 1st April 2013. The NRLM programme is renamed as Dindayal Antyoday Yojna NRLM (DAY-NRLM) on 29th March 2016. The blocks and districts where all the components of DAY-NRLM will be implemented either through SRLMs or partner institutions or NGOs, are intensive blocks and districts whereas remaining blocks and districts are non- intensive blocks and districts. Women SHGs under DAY-NRLM consists of 10-20 women. In case of special SHGs i.e. groups in difficult areas, groups with disabled persons and groups formed in remote tribal areas, the number may be 5. DAY-NRLM will be providing financial assistance in the form of revolving fund, to the SHGs which are in existence for 3-6 months and follow the norms of good SHGs. i.e. Panchsutra. Regular Meetings, Regular Savings, Regular in house Leading, Regular Recoveries and maintenance of proper books of accounts. Amount of RF is between Rs.10,000 – 15,000 /depending on grading of the SHG. Capital subsidy is discontinued in DAY-NRLM. DAY-NRLM has the provision of interest subvention in the scheme to cover the difference between the lending rates of the banks and 7%, on all the credits from banks/ financial institutions availed by the women SHGs up to Rs.3 lakhs per SHG, maximum 5.5%. The interest subvention is available only when bank charges maximum 12.5% interest. In the identified districts – Intensive districts(250) banks will lend to women SHGs by 7% upto an aggregate amount of Rs.3 lakhs. On prompt repayment SHG will get additional interest subvention of 3%, thus by reducing effective rate of interest to 4%. Community Investment Support Fund (CIF) will be provided to the SHGs in intensive blocks routed through the village level, cluster level federations.
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Eligibility Criteria for SHGs to avail loan : i) SHG should be 6 months old and active. Age of SHG should be counted from the date of formation and not from date of account opening. ii) SHG must be following Panchsutra i.e. regular meetings, regular savings, regular in house lending, regular recovery, up to date book of accounts. iii) SHG should qualify as per grading norms fixed by NABARD.
Loan Amount: The amount of various doses of credit are as under: I) CASH CREDIT LOAN (CCL) Branch has to sanction CCL limit Rs.5 lakhs for the period of 5 years with yearly enhancement of limit. Drawing power may be enhanced at the time of review of the account. 1) Drawing Power for 1st year: - 6 times of the existing corpus or Rs.100,000/- which is higher. 2) Drawing power for 2nd year: - 8 times of the corpus at the time of annual review / enhancement or minimum Rs.2 lakhs whichever is higher. 3) Drawing power for 3rd year: - minimum Rs.3 lakhs based on the micro credit plan prepared by SHG and appraised by federation/support agency and previous credit history. 4) Drawing power for 4th dose and onward: - Minimum Rs.5 lakhs based on the micro credit plan prepared by SHG and appraised by the federation / support agency and the previous credit history. II) TERM LOAN (TL) In case of Term Loan, the amount is sanctioned in doses as mentioned below:
1) First Dose: 6 times of existing corpus or minimum Rs.1 lakh whichever is higher. 2) Second Dose: 8 times of the existing corpus or minimum Rs.2 lakhs whichever is higher. 3) Third Dose: Minimum Rs.3 lakhs based on micro credit plan prepared by the SHG and appraised by the federation/support agency and the previous credit history. 4) Fourth dose: Minimum Rs.5 lakhs based on micro credit plan prepared by SHG and appraised by federation/support agency and the previous credit history. Corpus consist of Total savings of SHG, revolving fund received, Interest Paid by the bank on SB A/c in the last year, Interest generated in in-house lending, income from other sources if any.
Repayment schedule:- I) First dose/ first year will be repaid in 12-18 months in monthly or quarterly instalment. II) Second dose / second year will be repaid in 18 -24 months in monthly or quarterly instalments. III) Third dose / third year will be repaid in 24-36 months in monthly or quarterly instalments.
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IV) Fourth dose onwards: Repayment has to be either monthly/quarterly/half yearly based on cash flow and it has to be between 3 to 6 years. Security and Margin: No collateral and no margin will be charged up to limit of Rs. 10 lakhs. No lien should be marked on SB account of SHG and no deposit should be insisted while sanctioning of loan. Others: 1) There will not be any processing fee up to limit Rs.50 thousand. But for above loan limit, processing charges will be as per charges of agriculture loan limits. 2) Assets created out of bank finance must be insured by the SHG. 3) While opening of SHG loan account, in free code 3, code 154 i.e. NRLM SHG should be included. Branches should check inclusion of SHG data on the internet site of Aajivika. 4) While opening of SB account of SHG, cust ID should be created first and then form- 60 should be added through CUMM, then PAN number will not be asked by the system. Branch need not take PAN card of all the members. 5) Branches have to create a customer ID of individual member of SHG account through CUMM menu option, if presently not available in the finacle, then branches have to link the individual member’s customer ID under SHG Cust-ID through menu option CUMM-P.(Branch Circular No.110/133 dated 18.10.2016).
Self-Employment Scheme for Rehabilitation of Manual Scavengers (SRMS)- Manual Scavenger is defined in Prohibition of Employment as Manual Scavengers and their Rehabilitation Act,2013 as a person engaged or employed at the commencement of this act or at any time thereafter by an individual or a local authority or an agency or a contractor, for manually cleaning, carrying, disposing of, or otherwise handling in any manner, human excreta in an insanitary latrine, or in an open drain or pit into which human excreta from the insanitary latrines is disposed of, or on a railway track or in such other spaces or premises, as the Central or a State Government may notify, before the excreta fully decomposes in such manner and the expression “manual scavenging” shall be interpreted accordingly. • Cash Assistance-Identified manual scavengers, one from each family will be eligible for cash assistance of Rs.40,000/- immediately after identification and he will be allowed to withdraw the amount in monthly instalment of RS.7,000/- • Project Cost- Rs.10 lacs. However for sanitation projects such as vaccum loader, suction machine with vehicle/Garbage disposal vehicle etc. it can be extended to Rs.15 lacs. • Provision of Capital Subsidy (Back-end subsidy) Up to Rs.2,00,000/- 50% of cost of project o o 2,00,000/- to 5,00,000/- Rs.1 lacs+33% of project cost between RS.2-5 Lacs. o 5,00,000/- to 10,00,000/- Rs. 2 lacs + 25% of project cost between Rs. 5-10 lacs
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o 10,00,000/- to 15,00,000 Rs.3,25,000/-. • Rate of Interest-For project up to Rs.25,000/- 5% per annum (4% per annum for women beneficiaries) o For project cost above Rs.25,000/- 6% per annum • Moratorium Period-Up to two years • Training Period and Stipend during training period-Training period two year and stipend during training period Rs.3,000/- • Repayment Period (Including Moratorium period) o For project costing up to Rs.5 lakhs – 5 years o For projects costing more than Rs.5 lakhs - 7 years.
DAY-National Urban Livelihood Mission (NULM)-(Br.Cr.113/60 dated 25/06/2019) Swarna Jayanti Shahari Rozgar Yojna (SJSRY), poverty alleviation programme for urban poor of Government has been restructured and now has been named as National Urban Livelihood Mission. Following are the special features of the scheme- • The scheme is applicable to all district Head Quarters and all the cities with population of 1 lakh and above for urban poor living below Urban Poverty Line. • 30% beneficiaries should be women, 15% from minorities and 3% beneficiaries should be differently abled persons. • SC/ST beneficiaries should to the extent of proportion of their strength in local population. • Loan can be sanctioned individuals beneficiaries as well to groups. • Minimum membership for SHG in NULM is 3. • Maximum loan limit for individual beneficiary is Rs.2 lakhs and Rs.10 lakhs for SHG. • Banks will be eligible for interest subsidy at the rate of difference between 7% and prevailing rate of interest of Bank. Additional 3% interest subsidy will be provided to all women SHGs, who repay their in time promptly. • Interest subvention to be claimed through ZO/HO. HO will lodge claim in “PAiSA”(Portal for Affordable Credit and Interest Subvention Access – a portal developed by Allahabad Bank) and after receiving claim amount will credit to borrowers account. • Loan is to be repaid in 5 to 7 years after initial moratorium period of 6 to 18 months. • Project cost not exceeds Rs.2 lacs for individuals, maximum Rs.10 lacs for group. • While opening loan account under NULM, 105 must be put in free code 3. PMMY • Activities under non-farm sector covering manufacturing, services and trading activities and under farm sector allied agriculture activities excluding crop loan, land development, well loan and minor irrigation • Segments of PMMY i) Shishu loan limit-Rs.50,000/- MIS code in free code 3----300 ii) Kishor loan limit-Rs.50,001/- to 5 lakhs free code 3----369 iii) Tarun loan limit-above Rs.5 lakhs to Rs.10 lakhs free code 3----370 Vijeta – March 2020 Page | 66
• Margin –15%, for loan upto Rs.50,000/- NIL margin • Security – 1) Hypothecation of assets created out of bank finance. 2) Personal guarantee of promoter or director as the case may be • Insurance cover – CGFMU (under NCGTC) • Charges – Refer br. Cir 112/129 dated 12/12/2018 w.e.f.15-01-2019. • Documents – application for shishu – one page application Application for others MSE1 and proposal MSME2 • Repayment – 5 to 10 years • Subsidy – no subsidy in Mudra Loan
Prime Minister Employment Generation Programme (PMEGP) (Br.Cr.102/139 dated 10/11/2008
The Scheme is implemented by Khadi and Village Industries Commission (KVIC), as the nodal agency at the National level. At the State level, the Scheme is implemented through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs) and District Industries Centres (DICs) and banks. The Government subsidy under the Scheme is routed by KVIC through the identified Banks for eventual distribution to the beneficiaries / entrepreneurs in their Bank accounts.
The maximum cost of the project/unit admissible under manufacturing sector is Rs.25 lakh and under business/service sector is Rs.10 lakh.
Any individual, above 18 years of age. At least VIII standard pass for projects costing above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business / service sector. Only new projects are considered for sanction under PMEGP. Self Help Groups (including those belonging to BPL provided that they have not availed benefits under any other Scheme), Institutions registered under Societies Registration Act,1860; Production Co-operative Societies, and Charitable Trusts are also eligible.
Existing Units (under PMRY, REGP or any other scheme of Government of India or State Government) and the units that have already availed Government Subsidy under any other scheme of Government of India or State Government are NOT eligible.
Objectives: I. To generate employment opportunities in rural as well as urban areas of the country through setting up of new self-employment ventures/projects/micro enterprises. II. To bring together widely dispersed traditional artisans/ rural and urban unemployed youth and give them self-employment opportunities to the extent possible, at their place. III. To provide continuous and sustainable employment to a large segment of traditional and prospective artisans and rural and urban unemployed youth in the country, so as to help arrest migration of rural youth to urban areas. IV. To increase the wage earning capacity of artisans and contribute to increase in the growth rate of rural and urban employment.
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Benefits:
The maximum cost of the project/unit admissible under manufacturing sector is Rs.25 lakh and under business/service sector is Rs.10 lakh. Per capita investment should not exceed ₹ 1.00 lakh in plain areas and ₹ 1.50 lakhs in Hilly areas. Own contribution 5% to 10% of project cost. General category beneficiaries can avail of margin money subsidy of 25 % of the project cost in rural areas and 15% in urban areas. For beneficiaries belonging to special categories such as scheduled caste/scheduled tribe /women the margin money subsidy is 35% in rural areas and 25% in urban areas.
Quantum of Margin Money /Subsidy is given as follows: Beneficiary’s own Rate of Categories of beneficiaries under PMEGP contribution (of Subsidy project cost) Area (location of project /unit) Urban Rural General Category 10% 15% 25% Special (including SC/ ST/ OBC/ Minorities/ Women, Physically handicapped, Ex- 05% 25% 35% Servicemen, NER, Hill and Border areas etc. Other information Repayment of 84 months. Application can be forwarded by KVIC, KVIB & DIC. Every state is allotted to a PSB as a nodal Bank for settlement of subsidy claim. Therefore branch to send subsidy claim to the authorized branch of nodal bank only. Subsidy should be kept in Subsidy Reserve Fund A/c under lock-in-period of 3 years. It can be appropriated after that with the permission of sponsoring department (KVIC, KVIB, DIC) only. Interest charged to the loan account will be net of subsidy. 2nd Financial Assistance under PMEGP (Br.Cr.113/08 dated 03-04-2019) This loan is available to the units for upgrading, which are running well in terms of turnover, profit making and repaying the loan promptly. Financial assistance up to Rs.1 crs can be given to manufacturing unit and Rs.25 lakhs to service sector units. Objectives: 1) to fulfil the need of additional financial assistance for upgrading and expansion to successful and well performing units. 2) To cater the need for bringing the new technology/ automation to modernize the existing unit. 3) To enhance the productivity of the existing unit with additional financial assistance. 4) To enhance the capacity of the existing unit with additional employment generation. Eligibility: 1) All existing units financed under PMEGP / MUDRA and whose margin money is adjusted and loan is repaid properly within stipulated time. 2) Unit should have been making profit for last 3 years. 3) Registration under Udyog Aadhaar is mandatory.
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4) Beneficiary may apply to the same bank from where he has availed 1st loan or he may apply to another bank also. 5) Second loan should lead to additional employment generation. Quantum and nature of financial assistance: 1) Maximum cost of project unit under manufacturing sector for upgradation is Rs.1 crores. 2) Maximum cost of project unit under service / trading sector for upgradation is Rs.25 lakhs. 3) Beneficiary contribution is 10% of proposed expansion / upgradation. 4) Rate of subsidy is 15% (NER and hilly states 20%) 5) Financial assistance by the banks will be in the form of term loan. 6) Ceiling of construction of building should not exceed 25% of the sanctioned project cost. 7) The capital expenditure component including cost of construction should not exceed 60% of the total project cost. Working capital cost should not exceed 40% of the project cost.
Other Conditions :
1) For 2nd loan clearance certificate of the first bank is necessary. 2) As per existing guidelines lock-in-period for margin money of 2nd loan is 18 months.
Implementing and Monitoring Agency:
At national level it is KVIC and at state level KVIB & DIC. On PMEGP e-portal there is a separate link for 2nd financial assistance. Concerned bank will sanction loan within 60 days and claim margin money as per procedure in PMEGP. Margin Money will be kept in TDR and no interest will be paid. Concerned bank and agency will make joint inspection. Third party inspection will be carried out by KVIC separately. CGTMSE cover can be obtained by paying requisite fee.
STAND UP INDIA
Shri Narendra Modi, Hon’ble Prime Minister of India in his Independence Day speech on 15th August 2015 unveiled Stand Up India Scheme. The scheme promotes entrepreneurship at grass root level for economic empowerment and job creation. The scheme aims at institutional credit structure for underserved sector of people like SC, ST and woman entrepreneurs above 18 years. The scheme covers all bank branches of India and expect to reach 2.5 lakh cases upto 31 March 2017.The scheme is operated in 3 ways :- 1) Directly at the branch 2) Through SIDBI’s Stand Up India portal (www.standupmitra.in) 3) Through Lead District Manager This loan can be given to greenfield enterprises only. The potential borrower will register on the portal first. He will answer a set of 8-10 questions. Depending upon the response, applicant will be classified as ready borrower or trainee borrower. Ready borrower doesn’t require any hand holding, loan application process starts and application number is generated. Information of the borrower
Vijeta – March 2020 Page | 69 is shared with concerned bank branch, LDM, SIDBI and NABARD. The offices of SIDBI/NABARD will be Stand Up Connect Centre (SUCC). Generated application will be tracked by all the above. If applicant indicates need for hand holding, then the application is shared by LDM, SUCC and indicated Hand Holding agency. Once the hand holding is done properly, to the satisfaction of LDM and borrower, application is generated and shared with concerned bank branch. In Stand up India, applicants from SC, ST category and woman are eligible for loan. Loan limit may be between Rs.10 lakhs to 1crore. Loan shall be composite loan of term loan for plant and machinery and working capital. Bank finance will be 75% of project cost and the rate of interest would be MCLR+3%+tenor premium. Loan will be repayable in 7 years with moratorium of 18 months. Besides primary security the Stand Up India Loans are covered under NCGTC and norms are aligned with CGTMSE scheme. Stipulated margin is 25%, of which borrower’s contribution will be 10% and rest can be provided in convergence with other central/state govt. schemes. DLCC will review the progress. While opening loan account, in free code 3….372, Stand Up India Scheme should be added. Details of the scheme are given in Br.Circular 110/51 dated 27-05-2016
STAR START UP SCHEME • Eligibility -- Entity incorporated or registered in India not prior to 5 years. Annual turnover not exceeding Rs.25 crores in any preceding financial year. Entity should be working towards innovation, development, deployment or commercialization of new products, processes and services driven by technology or intellectual property. Entity must obtain certification from inter–ministerial board set up for the scheme. • Quantum of finance -- Term Loan/Working Capital/Non Fund based limit. Mini: Rs.0.10 Crores Maxi : Rs.5.00 Crores. • Margin -- Term Loan-25%, working capital-10%. • Security -- Primary– Hypothecation/mortgage of assets purchased out of bank finance. • Collateral – CGTMSE/credit guarantee funds for start-up by NCGTC. • Repayment - Working Capital: 12 months subject to annual review. Term Loan: 120 months including moratorium of 24 months. • Delegation -- NBGLCC and above. • Note: Any seed capital/venture capital invested should be treated as margin / equity for DER.
PRADHAN MANTRI AWAS YOJANA Prime Minister has envisioned “Housing for All by 2022” Pradhan Mantri Awas Yojana was launched in the entire nation on 17-06- 2015. This mission is for urban areas and will be implemented during 2015-22. It is operational in all statutory towns and planning areas as notified with respect to the statutory town and which surrounds the concerned municipal areas. 1. In Situ – slum redevelopment. Slum rehabilitation of slum dwellers with participation of private developers using land as resource.
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2. Affordable housing through credit linked subsidy scheme - CLSS. 3. Affordable housing in partnership with public and private sectors. 4. Subsidy for beneficiary- led individual housing construction.
CLSS vertical of the scheme is monitored by monitoring committee consisting of secretary ( Ministry of Housing and Urban poverty alleviation) and Secretary (DFS) as Co-chairs. National housing bank(NHB) and Housing and Urban Development Corporation (HUDCO) have been identified as Central Nodal Agencies. Beneficiary family comprises Husband, Wife, unmarried sons and unmarried daughters. Condition of the scheme – beneficiary family should not own a pucca house either in his / her name or in the name of any family member in any part of India. Credit linked subsidy scheme (CLSS) is available to economically weaker section and lower income group. Family where household family income is Rs.3 lakhs and dwelling unit of 30 Sq.mtr. Is Economically weaker section( EWS). Family having household income Rs.3- 6 lakhs belongs to lower income group( LIG). Beneficiaries of EWS & LIG seeking housing loan from banks, housing finance institutions or like institutions are eligible for interest subsidy at the rate of 6.5% (loan Rs.6 lakhs) Net present Value of interest subsidy is calculated at the discounted rate of 9%. For loan up to 9 lakhs (for MIG-I) interest subsidy is 4% & for loan up to 12 lakhs (for MIG-II) interest subsidy is 3%. Repayment period may be 20 years, up to which interest subsidy is provided. Credit linked subsidy will be available for new construction and or addition of rooms, kitchen, toilet etc. to the existing dwellings as incremental housing. Carpet area for EWS beneficiary is 30Sq.mtr., even though beneficiary may build bigger house, but interest subvention will be available for 30 Sqmtr. portion only. Carpet area for LIG beneficiary is 60Sq.mtr., even though beneficiary may build bigger house, but interest subvention will be available for 60 Sqmtr. portion only. Note ; Interest subsidy @ 6.5% for tenure of 20 years or during tenure of loan whichever is lower. Processing fee: 0.25% of sanction limit. Bank has to claim max Rs.1500/- (per account as processing fee from NHB) Scheme is implemented in MIG I & MIGII cities Loan tenure : 9 lakhs & 12 lakhs Carpet area : 90 mtrs. & 110 mtrs (as per HOBC) Tenure : 20 years in both cases Bank may sanction more loan but the interest subvention will be available up to this amount.
Household income : Mini. 6 lakhs & 12 lakhs Max 12 lakhs & 18 lakhs
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Product Free Code 3 EWS 445 LIG 448 MIG-I 449 MIG-II 450
PMAY (GRAMIN) Old Name of the Scheme:- Indira Awas Yojana Launched on 20 November 2016 by Shri.Narendra Modi, Prime Minister of India. Aim of the scheme:- To construct 1 Crore pucca houses in rural areas in next 3 years by providing financial assistance. Eligibility :- 1) The beneficiaries are selected using housing deprivation parameters in the Socio Economic and Caste Census (SECC), 2011. 2) Preference is given to homeless or who are living in kuchha house. 3) Every year a list of beneficiaries is made. 4) 60% of the target earmarked for SC/ST subject to availability of beneficiaries
Financial Assistance :- 1) Plane Areas :- Rs.1,20,000/- 2) Hilly Areas :- Rs.1,30,000/- 3) Along with financial assistance, every beneficiary will be offered 90 to 95 days wages for construction work, which would be almost Rs.18,000/-. A sum of Rs.12,000/- will be offered for construction of toilet. Other Benefits 1) Financial Assistance will be transferred to the bank or Post Office account of the beneficiary. 2) Minimum space of the house is 25 Sq.meters. 3) Training or Engineer will be given for construction and the house will be built with latest technology and earthquake proof and safe from other natural calamities.
PRADHANMANTRI CREDIT SCHEME FOR POWERLOOM WEAVERS HOBC 112/72 dated 31.08.2018 AIM:- To provide Margin Money subsidy and interest reimbursement as against the credit facility availed under PMMY by the powerloom weavers/ units. Margin Money subsidy against the credit facility under Stand up India scheme. PMMY(Category I) - Eligible beneficiaries: Existing Individual Powerloom units, new individual/group enterprises, invlolved in weaving activity who are registered with MSME/ Udyog Aadhar/ Information memorandum(IM) acknowledgement issued by office of the textile commissioner. Group enterprises will be covered without credit guarantee of the govt. and as per the lending norms of the bank. Unit should not have benefited under ATUF scheme. Financial Assistance:
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1) Margin Money Subsidy @20% of the project cost having ceiling of Rs.1.00 lakh. 2) Interest subvention @6% / year both for working capital and term loan up to Rs.10.00 lakhs for maximum period of 5 years. 3) Maximum loan limit will be Rs.10 lakhs. 4) Only new loans are eligible for the scheme. 5) Credit guarantee fee 1% of the loan amount or actual fee whichever is less is charged by the CGTMSE/ NCGTC. It is not applicable to group activity.
STAND UP INDIA (Category II) - Eligible beneficiaries (Power Tex Stand Up India Scheme) 1) Only new powerloom units established by person belonging to SC, ST or Woman entrepreneur. 2) In case of non-individual units at least 51% of the shareholding and controlling stake should be held either by SC, ST or woman entrepreneur.
Financial Assistance: 1) 25% of margin money subsidy up to a project cost of Rs.1 crore with a ceiling of Rs.25 lakhs, the borrower is required to bring 10% of the project cost as his/her own contribution. 2) Loan shall be from Rs.10 lakhs to Rs.1 crore. 3) Repayment shall be as per prevailing norms of the bank. 4) Credit guarantee fee 1% of the loan amount or actual fee whichever is less is charged by the CGTMSE/ NCGTC. Process flow for PowerTex Mudra Scheme and Power Tex Stand Up India Scheme is as under:- a) The borrower will submit application to the ministry through online portal www.ipowertexindia.gov.in b) After initial scrutiny ministry will forward the application online to the concerned bank branch directly. c) The branch will approve the application and fill the sanction details and also upload the sanction letter. d) After approval of application and after installation and commissioning of the machinery, unit will submit request for inspection by the Joint Inspection Team (Team=branch+Regional Office of Textile Commission). Claim Processing: 1) Branch will submit interest subsidy claims online to the nodal office. 2) Nodal office will forward the claim to the ministry. 3) Office of the textile commissioner will release the subsidy through the bank.
Atal Pension Yojana-
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Government of India has launched the ATAL PENSION YOJANA scheme to provide defined pension, depending on the contribution, and its period. Following are special features of this scheme- • The scheme will focus on all Citizen of India especially those in the unorganized sector, who do not have any formal pension provision. It will encourage the people to save voluntarily for retirement benefits. • Person aged between 18 years and 40 years, who have their Bank account and are not member of any other statutory social security scheme, who are not income tax payer are eligible to subscribe under this scheme. • Minimum contribution (at the age of 18) would be Rs.42/- per month to get pension of Rs.1000/- per month starting at the age of 60. Contribution amount may vary depending upon the age of subscriber and amount of pension required. Maximum contribution would Rs.1454/- per month to have pension of Rs.5,000/- per month if a subscriber joins the scheme at the age of 40 Thus minimum pension would be RS.1000/- and maximum would be Rs.5000/- • Maximum period of contribution at the age of 18 would be 42 years and and, and if person joins at the age of 40 years it would be 20 years. • Existing Swavalamban Scheme Subscribers between the age of 18-40 would be migrated to Atal Pension Yojna. • There is penalty for default – Rs.1/- per month for contribution up to Rs.100/- per month, Rs.2/- per month for contribution up to Rs.101 to 500/- per month and Rs.5/- per month for contribution between Rs.501/- to 1000/- per month and Rs.10/- per month for contribution beyond Rs.1001/- per month. • Discontinuation of payments of contribution amount may lead to following . After 6 months account will be frozen. . After 12 months account will be deactivated. . After 24 months account will be closed. • Continuous information alerts will be sent to subscribers by way of SMS. • Exit before the age of 60 is permitted by making specific application to PFRDA or in the event of death of beneficiary or terminal disease. • Upon completion of 60 years of age, the subscriber will submit the request to the concerned Bank for drawing the guaranteed pension amount.
Atal Pension Yojana (APY) – Full Details with Applications. (A) Hand out on Atal Pension Yojana (APY). 1) Open menu option ‘EPAY’ and click on ‘PENSION’ option. 2) New Screen open and click on ‘ATAL PENSION YOJANA (APY)’ (now only this option available). 3) New screen open and options are (a)‘ATAL PENSION YOJANA (APY) SUBSCRIBER REGISTRATION FORM’. (b) ‘ATAL PENSION ACKNOWLEDGEMENT’. (c) ‘ATAL PENSION DOWNLOAD2’. (d) PRAN Upload. (e) Atal Pension Scroll. (f) Atal Pension Scroll Node.
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4) Now click on ‘ATAL PENSION YOJANA (APY) - SUBSCRIBER REGISTRATION FORM’. 5) New screen open and default ‘Add’ (Add / Modify / Inquiry / Verify) option selected. Default today’s date also reflects. Just put subscriber SB account number and click on submit. 6) New screen open and customer details will automatically populated as name, date of birth, mobile no, Aadhaar Number and Pan no / Form60/Form61. 7) Now select radio button Title of subscriber and put details marital status also. Write name of spouse and Spouse Aadhaar Number. Also write Nominee’s name and Nominee Aadhaar in appropriate column. Select Nominee relationship with the subscriber. You have to furnish additional details of Guardian in case of Nominee is a minor. 8) Select Whether beneficiary of other security schemes as ‘Yes’ or ‘No’. 9) Select Whether Income Tax Payer as ‘Yes’ or ‘No’. 10) Select Pension amount from radio button as Rs. 1000/- or Rs. 2000/- or Rs. 3000/- or Rs. 4000/- or Rs. 5000/-. 11) After selecting the pension amount the monthly instalment automatically populated in screen. 12) Now submit and finish message reflect. 13) Verify through same menu by another user. After putting subscriber account number subscribers PRAN number will populated in appropriate column. Now submit the same.
(B) Handout on upgrade / downgrade of pension amount in APY. (1) The option for upgrade / downgrade of pension amount would be permitted once in year during the month of April 2019. A Menu option to process upgrade / downgrade of pension is already provided in the APY module which would be enabled in April 2019 after receiving suitable instructions from PFRDA. (2) Basic Requirement to exercise upgrade / downgrade option. (a) Subscribers must have contributed regularly and all his previous contributions till the last month have been paid. (b) Upgradation of Pension - Differential amount is payable which comprises of. (i) Difference between the old contribution amount and New contribution amount multiplied by number of months plus Interest @8% p.a on monthly compounding basis. (ii) The differential amount has to be paid first and only then would the request for change in pension amount updated. (iii) New contribution amount would be calculated on the age as on date of PRAN registration. (c) Downgradation of Pension - The difference amount would be refunded to subscriber savings account after change request has been uploaded to NSDL. (3) Operational Procedure for Entering the Change Request in EPAY Menu. (a) A new link / Menu option “Pension Amt Upgrade/ Downgrade” already is available in APY module to enable branches to register the change requests. On clicking on the link, a data input page
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opens. A Drop down Box is available (Actions permitted ADD/Inquiry/Verify/Delete). (b) ADD mode (i) Choose ADD option. Enter PRAN number in the designated box and Submit. (ii) Next page opens. Basic details like Account number, PRAN, Name, Date of Application, Date of Birth, Age, old pension, contribution, frequency etc. would be displayed. New pension amount has to be selected from the drop down box. Now Submit. (iii) System will now check, calculate and display the following amounts. . System calculates the differential amount payable including interest. It will also display the bank charges payable. . System will also check if any installments upto March 2017 are in default and if yes, displays the total amount payable along with penalty.
(c) Inquiry mode - Please use the inquiry mode to check the details entered in ADD mode. If the new pension amount chosen and the new contribution amount are as per scheme, you may proceed to next step i.e, recovering the differential amount and default instalments, if any, using TM menu in finacle. If you find any error, please exit and use DELETE option to delete the record. The record cannot be deleted once the same has been verified. (d) Recovery of Amount payable and Default Instalments. (i) Use TM menu to post separate vouchers sets for. o Differential amount - debit the customer’s account and credit Br. “APY Pool Account SOLIDSUNCR889”. o Bank Charges - debit the customer’s account and credit Br. P&L account. o Default instalments - debit the customer’s account and credit Br. “APY Pool Account SOLIDSUNCR889”. o Please note down the transaction IDs & date.
(e) Verification Mode - A different user has to login to the menu. Choose verify option. On this page, please enter the transaction ID and date in the respective boxes. System will check for the transaction ID’s and the amount and permit you to proceed. Now Click on Finish. (f) The record is now successfully added to the UPLOAD file. (4) Important points. (a) The option can be exercised only once a year in the month of April. (b) “Form to upgrade / downgrade Pension Amount” (attached) needs to be obtained from the interested subscriber duly filled in and signed. The inbuilt acknowledgement form should be filled in, signed by branch official and handed over to the subscriber. The main portion should be carefully filed with the main application form of the subscriber.
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(c) Contribution (Instalment) amount upto March 2019 should NOT be in arrears. Else, the same needs to be paid along with Penalty. (d) The differential amount, in case of upgrade, along with interest @ 8% p.a compounded monthly is payable upfront. This amount needs to be remitted first to PFRDA. The change request would be effected thereafter. (e) Bank charges of Rs.25/- payable per request. PFRDA would recover another Rs.25/- from the account of the customer at their end. Branches to prepare and post separate voucher set for Bank charges. This amount to be credited to branch P&L account. (f) Branches to display prominently in their notice board the availability of the upgrade / downgrade option in APY scheme. All APY subscribers to be contacted by branches and availability of upgrade / downgrade facility informed. This is essential as Mobile numbers were not updated properly in CBS in most of the accounts and hence bulk SMS cannot be sent. (g) The menu option in APY module would be open for registration of upgrade / down grade requests upto 25th of April 2019. Branches to collect the applications, ADD the data, recover the differential / Default amounts and verify on daily basis. It would be the responsibility of the Branch to complete the exercise on the same day to avoid complaints from the subscribers. (C) Hand out on Voluntarily exit from APY (Atal Pension Yojana)
(1) Now voluntarily exit from APY can be done from branch itself. Invoke menu EPAY and click on Pension and APY and proceed further. (2) The conditions are – (a) APY account status should be “ACTIVE”. (b) SOL to which the APY account has been linked (opened) can only lodge the request. If SB account has been transferred to another SOL, then an IOM has to be forwarded first to us for modification of subscriber details at NSDL giving the new SOL ID, IFSC code & MICR code. The new SOL would thereafter lodge the request. Please note that if the first SOL lodges the request, the refund would get returned to PFRDA due to incorrect IFSC code and the branch has to reconcile this. (c) Mobile number should be available in the SB account (linked to PRAN) in Finacle. Mobile number would be picked up automatically and populated in the central file at HO. As otherwise the record would be rejected by NSDL. Hence, branches to check this before proceeding to lodge closure request. (d) APY closure form duly filled up, signed by subscriber and acknowledged by the branch should be carefully filed with APY account opening form and should be preserved for future scrutiny. (e) Signature of subscriber on the APY closure form to be tallied and verified with customer records.
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(3) Lodgement of APY voluntary exit (closure) request. (a) Choose “voluntary exit from APY” menu option from EPAY>>Pension>>Atal Pension Yojana>> voluntary exit from APY. (b) Four options are available – ADD, VERIFY, INQUIRE and DELETE. (c) Select “ADD” option. Enter the PRAN number of the customer in the given box. Click on submit. A page containing details of the subscriber is displayed. The request should carefully check whether the details like PRAN, Account number, Name etc. match with that given in the APY account closure form or not. (d) Branch has to click the correct reason for closure as indicated by the customer in his APY closure form. Three options are available. When the “Others” option is ticked, the reason given by the subscriber needs to be typed in the given box in brief. Do not use special characters or junk values here which may lead to rejection of the record. When any of the other two options is ticked, NO message/ reason needs to be typed in the box. (e) Now Click on “close account” button. A message “Closure request for PRAN ----- entered. Now Please verify the same. (4) Now VERIFY. Another user has to open the “voluntary exit from APY” option. Select “VERIFY” option. Enter the PRAN number in the box and click on submit. The details of the subscriber for whom the closure request has been entered along with the reason for closure would be displayed. If all particulars are found correct, the official may proceed to press the submit button. A message “voluntary exit request for PRAN ------verified & Closed successfully.” (5) If the details on the page do not match with the closure application or if a wrong PRAN is selected by mistake, the user can exit the menu by clicking on cancel button. (6) Branch can check the details of PRAN for which closure request has been lodged by using the “INQUIRY” option. (7) If ADD option was already exercised and it was discovered that a wrong PRAN has been selected, then “DELETE” option to be used to delete the record. Please note that DELETE option will NOT work if closure request has been verified. Upon clicking the submit button the message “Request for Voluntary exit of PRAN ------deleted successfully.” (8) One may check the status in “Atal Pension Yojana (APY) – subscriber registration” inquiry. The account status would be “INACTIVE”. (9) Now branches need not send any APY closure requests to HO but use the above functionality to lodge such requests. For any APY closure requests forwarded during this month i.e, April, branches to inquire the account status. If status is found “ACTIVE” then may use the above menu option.
(D) Hand out on any modification in APY. (1) Branch has to forward IOM to [email protected] containing the following details and recommendation along with scan copy of customer application / verified copy of proof of DOB (AADHAR / PAN) to enable them to take up the issue with PFRDA / NSDL. (a) Subscriber Name : (b) PRAN : (c) Date of APY Application : Vijeta – March 2020 Page | 78
(d) Date of PRAN activation : (e) Pension Amount : (f) Account No : (2) In case of Change Date of Birth (DOB). (a) Enclose a verified copy of proof of DOB (AADHAR / PAN). (b) Write details as per Incorrect DOB and Age as per Incorrect DOB and Premium as per Incorrect DOB. (c) Write details as per Correct DOB and Age as per Correct DOB and Premium as per Correct DOB. (3) In Case of Nominee Change. - Nominee details. (a) Name of Nominee (New) : (b) Is nominee Minor : Y/N (i) If yes, then Date of Birth : (ii) Name of Guardian : (c) Aadhar number of Nominee : (d) Relationship of nominee with subscriber: (4) For Subscriber Name / Address Modification kindly provide the following details. (a) Present name in PRAN Card. (b) New Name / New Address (CUMM to be modified first). (c) Reason for changing Subscriber Name. (d) Verified copy of AADHAR / PAN. (5) In Case of Mobile No / E-mail id Change in APY Subscriber amount. (a) Mobile No. (New). (b) E- Mail ID (new). (6) In Case of SB Account No. Change for deducting APY Subscriber amount. (a) Present SB account no. (b) New Account no. which is to be updated. (c) Reason for change in account no. (7) Note- Before forwarding application for change in DOB / Name / Mobile No / Email etc. to Head Office, please ensure to modify the same in CUMM first.
(E) Hand out on deceased claim settlement procedure in APY. (1) Exit in case of death of the Subscriber: In case, the Subscriber dies before the age of 60 years, there are two options, (a) Closure of APY account - In case, spouse wishes to exit from the scheme and close the account, the corpus will be settled in the name of spouse. If spouse is not present (where Subscriber is not married, divorced, legally separated or spouse has expired), then the corpus will be settled in the name of the nominee. (b) Continuation of APY account (only for Spouse) – The spouse would have an option to continue contributing to APY accounts of the Subscriber, which can be maintained in the spouse's name, for the remaining vesting period, till the original Subscriber would have attained the age of 60 years. The spouse of the Subscriber shall be entitled to receive the same pension amount as that of the Subscriber until the death of the spouse. (2) In case of death of the Subscriber before 60 years of age, (a) The Branch Official of APY-SP shall ensure that the spouse / nominee has filled up the correct form i.e. Account Closure Form for Death.
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(b) In case of married Subscriber, the Branch Official will identify the spouse (as registered in the APY system of CRA) and shall ensure that the form is filled up only by the spouse who is default nominee under APY. In case, the spouse is not present (where Subscriber is not married, divorced, legally separated or spouse has expired),the Branch Official will identify the nominee (as registered in the APY system of CRA) and shall ensure that the form is filled up by the correct nominee. (c) If the form is submitted by spouse, Branch Official shall check that spouse has provided the correct option in the form i.e., whether APY account to be closed or to be continued by spouse. (d) The branch officials have to check that the spouse / nominee has provided the complete and correct details in the form including the Bank Account Number along with the IFS Code. (e) In case of continuation of APY account by Spouse, Bank Official shall collect separate form for continuation under APY. (f) The Branch Official shall also collect the relevant documents for closure of account as per existing Banking norms / stipulated by PFRDA. (g) In case the exit request is submitted by any other claimant (other than the spouse / nominee registered in the APY system of CRA) Branch Official shall also collect a legal heir certificate OR a certified copy of family member’s certificate issued by Executive Magistrate indicating the relationship of the Claimant with the subscriber. (3) It will be responsibility of the Branch Official to check the veracity of the exit request and of the documents submitted along with the request. (4) The Branch Official shall check that the Bank Account provided in the closure form is active (if it is of the same bank), else shall confirm the same with spouse / nominee. (5) Acceptance and Issuance of Acknowledgment. If the exit form along with the complete details and documents (as required) is correct, the Branch Official shall accept the exit request. The Branch Official shall issue an acknowledgment to the Subscriber / spouse / claimant (as per the request) mentioning the Bank Account details to which the APY corpus of the Subscriber would be credited. (6) Submission of Requests to CRA. (a) The APY-SPs shall forward all the exit requests to CRA for processing along with the covering letter. A scanned image of the request (along with the IFSC code) may also be forwarded to ‘APY Claimassist’ on ([email protected]) to initiate the process. As an alternative, the requests shall be forwarded to CRA in the following address, APY Claim Processing Cell, 1st Floor, Times Tower, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013. (b) The letter should be signed by the Authorised Signatory or the Compliance Officer / Branch Head of the APY-SP. (c) In case of voluntary exit by Subscriber, Branch Official shall select the relevant remark in the form for transfer of Govt. co-contribution i.e., Credited, not credited, returned. If Branch Official has provided the remarks as "Credited", the amount equivalent to Govt co-contribution along with return will be deducted from the corpus of the subscriber and balance amount will be transferred to Subscriber. (7) Processing of requests at CRA.
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(a) CRA will handle the physical exit requests administratively. (b) CRA will only check for the Claimant’s name in the exit request received (received from the APY-SP) for death of the Subscriber. In case there is a mismatch in the Spouse / Nominee Name available in APY database and the Spouse / Nominee name in exit request form), the request will be kept on hold and the APY-SP will be informed to provide for clarification. (c) Once the exit request is processed, the redeemed amount based on the units available in APY account will be transferred electronically to Subscriber / Spouse / Nominee Bank Account as provided in APY Closure Form. (d) On transfer of funds, APY Claim Processing Cell will send a confirmation to APY-SP about execution of exit request. (e) In case of voluntary exit, if the Subscriber has already availed the Govt. Cocontribution, the equivalent amount along with return will be deducted from the corpus of the Subscriber and balance amount will be transferred to Subscriber.
(F) Hand out on Various Grievances / Requests regarding Atal Pension Yojana (APY). (1) Majority of the requests / grievances pertains to. (a) Transaction statement not received. (b) PRAN card not received (No physical card issued in case of APY). (c) Aadhaar updation. (2) With regard to above, NSDL-CRA has developed a frontend facility which would enables the nodal offices (Banks) to serve the subscribers in a better way by directing them to use these online facilities instead of approaching the bank branch every time. (3) To download Transaction Statement follow the below process. (a)Visit: https://npslite-nsdl.com/CRAlite/EPranAPYOnloadAction.do (b) Select from 2 option (with PRAN or without PRAN). (c) If selected with PRAN. (i) Enter PRAN. (ii) Bank Account Number. (iii) From “view of subscriber” option, selected SOT view. (iv) Enter captcha and submit. (d) If selected with without PRAN. (i) Subscriber Name. (ii) Bank Account Number. (iii) Date of Birth. (iv) From “view of subscriber” option, selected SOT view. (e) Note - Data entered must match with CRA records. (4) To download e-PRAN follow the below process. (a) Visit:https://npslite-nsdl.com/CRAlite/EPranAPYOnloadAction.do (b) Select from 2 option (with PRAN or without PRAN). (c) If selected with PRAN. (i) Enter PRAN. (ii) Bank Account Number. (iii) From “view of subscriber” option, selected APY e-PRAN view. (iv) Enter captcha and submit. (d) If selected with without PRAN. Vijeta – March 2020 Page | 81
(i) Subscriber Name. (ii) Bank Account Number. (iii) Date of Birth (iv) From “view of subscriber” option, selected APY e-PRAN view. (e) Note - Data entered must match with CRA records. (5) Process of Seeding of Aadhaar in APY PRAN. (a) Visit : https://npslite-nsdl.com/CRAlite/AadhaarOnloadAction.do (b) Enter PRAN, Aadhaar Number and Captcha in the relevant boxes and submit. (c) One Time Password (OTP) will be sent to registered mobile number in UIDAI (Aadhaar) database. (not the registered mobile number in CRA database). (d) On successful submission of request, 10 digit acknowledgement number will be displayed as a confirmation of seeded aadhaar. (6) Process for accessing “APY Mobile Application”. (a) Visit - Google Play Store. (b) Type APY and NPS Lite. (c) Download the APP “APY and NPS Lite”. (7) APY Mobile APP features. (a) Access through PRAN & One Time Password. (b) Download transaction statement (Financial Year Wise). (c) Facility to check last 5 contributions received. (d) Details like name, address, pension amount, contribution premium can be checked. (e) Note - OTP will be sent to mobile number registered in CRA records. Pradhan Mantri Suraksha Bima Yojana (PMSBY) Pradhan Mantri Suraksha Bima Yojna was introduced by GOI to provide accident insurance cover to citizens of India. Features of the scheme are as under:- 1) Applicant must be savings bank account holder of the branch. 2) Age of the applicant must be between 18 to 70 3) Yearly premium is Rs.12. It will be deducted by auto debit method only. 4) Rs.2 lakh insurance cover is provided to the account holder who joins the scheme. 5) Rs.2 lakh Insurance cover is provided for death, total irrevocable loss of both eyes, both hands or both legs in the accident. Rs.1 lakh cover is provided for loss of one eye, one leg or one hand in the accident. 6) Branch has to ensure that SB account holder retains the premium amount in the account at the time of renewal. 7) If the renewal is not done then the scheme is lapsed. Account holder can again join the scheme in future by making fresh application to the branch. 8) Insurance premium of Rs.12/- is appropriated in the following way:- Rs. 10/- per annum per member to insurance company Rs. 1/- per annum per member to BC/Micro/Corporate/Agent per annum per member Rs. 1/- per annum per member to bank as administrative expenses 9) In Bank of India, PMSBY is administered by New India Assurance Co. Ltd.
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REVISED RULES FOR THE PRADHAN MANTRI SURAKSHA BIMA YOJANA DETAILS OF THE SCHEME: PMSBY will be an Accident Insurance Scheme offering accidental death and disability cover for death or disability on account of an accident. It would be a one year cover, renewable from year to year. The scheme would be offered / administered through Public Sector General Insurance Companies (PSGICs) and other General Insurance companies willing to offer the product on similar terms with necessary approvals and tie up with Banks for this purpose. Participating banks will be free to engage any such insurance company for implementing the scheme for their subscribers. Scope of coverage: All individual bank account holders in the age group of 18 to 70 years in participating banks will be entitled to join. In case of multiple bank accounts held by an individual in one or different banks, the person would be eligible to join the scheme through one bank account only. Aadhar would be the primary KYC for the bank account. Enrollment Modality / Period: The cover shall be for the one year period stretching from 1st June to 31st May for which option to join / pay by auto- debit from the designated bank account on the prescribed forms will be required to be given by 31st May of every year. Joining subsequently on payment of full annual premium would be possible. However, applicants may give an indefinite / longer option for enrolment / auto-debit, subject to continuation of the scheme with terms as may be revised on the basis of past experience. Individuals who exit the scheme at any point may re-join the scheme in future years through the above modality. New entrants into the eligible category from year to year or currently eligible individuals who did not join earlier shall be able to join in future years while the scheme is continuing.
Benefits: As per the following table: Table of Benefits Sum Insured a Death Rs. 2 Lakh b Total and irrecoverable loss of both eyes or loss of use Rs. 2 Lakh of both hands or feet or loss of sight of one eye and loss of use of hand or foot c Total and irrecoverable loss of sight of one eye or loss Rs. 1 Lakh of use of one hand or foot
Premium: Rs.12/- per annum per member. The premium will be deducted from the account holder’s bank account through ‘auto debit’ facility in one instalment on or before 1 st June of each annual coverage period under the scheme. However, in cases where auto debit takes place after 1st June, the cover shall commence from the date of auto debit of premium by Bank. The premium would be reviewed based on annual claims experience. However, barring unforeseen adverse outcomes of extreme nature, efforts would be made to ensure that there is no upward revision of premium in the first three years. Eligibility Conditions: Individual bank account holders of participating banks aged between 18 years (completed) and 70 years (age nearer birthday) who give their consent to join / enable auto-debit, as per the above modality, will be enrolled into the scheme. Master Policy Holder: Participating Bank will be the Master policy holder on behalf of the participating subscribers. A simple and subscriber friendly administration & claim settlement process shall be finalized by the
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respective general insurance company in consultation with the participating Banks. Termination of cover: The accident cover for the member shall terminate on any of the following events and no benefit will be payable there under: 1) On attaining age 70 years (age nearest birthday). 2) Closure of account with the Bank or insufficiency of balance to keep the insurance in force. 3) In case a member is covered through more than one account and premium is received by the Insurance Company inadvertently, insurance cover will be restricted to one bank account only and the premium paid for duplicate insurance(s) shall be liable to be forfeited. 4) If the insurance cover is ceased due to any technical reasons such as insufficient balance on due date or due to any administrative issues, the same can be reinstated on receipt of full annual premium, subject to conditions that may be laid down. During this period, the risk cover will be suspended and reinstatement of risk cover will be at the sole discretion of Insurance Company. 5) Participating banks will deduct the premium amount in the same month when the auto debit option is given, preferably in May of every year, and remit the amount due to the Insurance Company in that month itself. Administration: The scheme, subject to the above, will be administered as per the standard procedure stipulated by the Insurance Company. The data flow process and data proforma will be provided separately. It will be the responsibility of the participating bank to recover the appropriate annual premium from the account holders within the prescribed period through ‘auto-debit’ process. Enrollment form / Auto-debit authorization in the prescribed proforma shall be obtained and retained by the participating bank. In case of claim, the Insurance Company may seek submission of the same. Insurance Company reserves the right to call for these documents at any point of time. The acknowledgement slip may be made into an acknowledgement slip- cum-certificate of insurance. The experience of the scheme will be monitored on yearly basis for re-calibration etc., as may be necessary. Appropriation of Premium: 1) Insurance Premium payable to Insurance Company: Rs.12/- per annum per member 2) Reimbursement of Expenses to BC/Micro/Corporate/Agent by insurer: Rs.1/- per annum per member 3) Reimbursement of Administrative expenses to participating Bank by insurer: Rs.1/- per annum per member Date of commencement of the scheme is 1st June 2015. The Annual renewal dates shall be each successive 1st of June in subsequent years. The scheme is liable to be discontinued prior to commencement of a new future renewal date if circumstances so require.
PRADHAN MANTRI JIVAN JYOTI BIMA YOJNA PMJJBY was introduced by GOI to provide insurance cover to citizens of India. Features of the scheme are as under:-
1) Applicant must be savings bank account holder of the branch. The account holder will provide certificate of good health along with enrolment form. Vijeta – March 2020 Page | 84
2) Age of the applicant must be between 18 to 50 3) Yearly premium is Rs.330/-. It will be deducted by auto debit method only. 4) Rs. 2 lakh insurance cover is provided to the account holder who joins the scheme. 5) Insurance cover is provided for the death due to any reason. 6) Insurance can be renewed up to the age of 55 provided account holder must have PMJJBY policy at the age of 50. 7) If the renewal is not done every year then the scheme is lapsed. Account holder can again join the scheme in future by making fresh application to the branch along with certificate of good health. 8) No insurance claim will be entertained upto 45 days from the date of enrolment. 9) Insurance premium Rs.330/- is appropriated as under:- Rs.289/- per annum per member to insurance company Rs.30/- per annum per member to BC/MICRO/CORPORATE agent Rs.11 per annum per member to bank as administrative expenses 10) In Bank of India, scheme is administered by SUD-Life.
REVISED RULES FOR PRADHAN MANTRI JEEVAN JYOTI BIMA YOJANA (w.e.f. POLICY YEAR 2018-19) 1. DETAILS OF THE SCHEME: PMJJBY is an Insurance Scheme offering life insurance cover for death due to any reason. It is a one year cover, renewable from year to year. The scheme is offered / administered through LIC and other Life Insurance companies willing to offer the product on similar terms with necessary approvals and tie ups with Banks for this purpose. Participating banks are free to engage any such life insurance company for implementing the scheme for their subscribers. 2. Scope of coverage: All individual account holders of participating banks in the age group of 18 to 50 years are entitled to join. In case of multiple bank accounts held by an individual in one or different banks, the person is eligible to join the scheme through one bank account only. Aadhar is the primary KYC for the bank account. 3. Enrolment period: For the cover period 1st June 2018 to 31st May 2019, subscribers are required to enrol and give their auto-debit consent by 31st May 2018. Those joining in subsequent months would be able to do so with payment of premium as described below; a) For Enrolment in June, July and August 2018 – Full Annual Premium of Rs.330/- is payable. b) For Enrolment in September, October, and November 2018 – pro rata premium of Rs. 258/- is payable c) For Enrolment in December 2018, January, and February 2019 – pro rata premium of Rs. 172/- is payable. d) For Enrolment in March, April and May 2019 – pro rata premium of Rs. 86/- is payable. Lien period of 45 days shall be applicable from the date of enrolment.
4. Enrolment Modality: The cover shall be for one year period stretching from 1st June to 31st May for which option to join / pay by auto-debit from the designated individual bank account on the prescribed forms will be required to Vijeta – March 2020 Page | 85
be given by 31st May of every year. Delayed enrolment for prospective cover is possible with payment of pro-rata premium as laid down in above para. For subscribers enrolling for the first time on or after 1st June 2016, insurance cover shall not be available for death (other than due to accident) occurring during the first 45 days from the date of enrolment into the scheme (lien period) and in case of death (other than due to accident) during lien period, no claim would be admissible. Individuals who exit the scheme at any point may re-join the scheme in future years. The exclusion of insurance benefits during the lien period shall also apply to subscribers who exit the scheme during or after the first year, and rejoin on any date on or after 01st June 2016. In future years, new entrants into the eligible category or currently eligible individuals who did not join earlier or discontinued their subscription shall be able to join while the scheme is continuing subject to the 45 days lien period described above.
5. Benefits: Rs.2 lakh is payable on member’s death due to any cause.
6. Premium: Rs.330/- per annum per member. The premium will be deducted from the account holder’s bank account through ‘auto debit’ facility in one instalment, as per the option given, on or before 31st May of each annual coverage period under the scheme. Delayed enrolment for prospective cover after 31st May will be possible with payment of pro-rata premium as laid down in para 3 above. The premium would be reviewed based on annual claims experience.
7. Eligibility Conditions: Individual bank account holders of the participating banks aged between 18 years (completed) and 50 years (age nearer birthday) who give their consent to join / enable auto-debit, as per the above modality, will be enrolled into the scheme.
8. Master Policy Holder: Participating Banks are the Master policy holders. A simple and subscriber friendly administration & claim settlement process has been finalized by LIC / other insurance companies in consultation with the participating bank.
9. Termination of assurance: The assurance on the life of the member shall terminate on any of the following events and no benefit will become payable there under: 1) On attaining age 55 years (age near birth day) subject to annual renewal up to that date (entry, however, will not be possible beyond the age of 50 years). 2) Closure of account with the Bank or insufficiency of balance to keep the insurance in force. 3) In case a member is covered under PMJJBY with LIC of India / other company through more than one account and premium is received by LIC / other company inadvertently, insurance cover will be restricted to Rs. 2 Lakh and the premium paid for duplicate insurance(s) shall be liable to be forfeited. 4) If the insurance cover is ceased due to any technical reasons such as insufficient balance on due date or due to any administrative issues, the same can be reinstated on receipt of appropriate premium as mentioned in Para 3
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above, subject however to the cover being treated as fresh and the 45 days lien clause being applicable. 5) Participating Banks shall remit the premium to insurance companies in case of regular enrolment on or before 30th of June every year and in other cases in the same month when received.
10. Administration: The scheme, subject to the above, is administered by the LIC P&GS Units / other insurance company setups. The data flow process and data proforma has been informed separately. Members may also give one-time mandate for auto-debit every year till the scheme is in force. It is the responsibility of the participating bank to recover the appropriate premium in one instalment, as per the option, from the account holders on or before the due date through ‘auto-debit’ process. Enrolment form / Auto-debit authorization / Consent cum Declaration form in the prescribed proforma shall be obtained and retained by the participating bank. In case of claim, LIC / insurance company may seek submission of the same. LIC / Insurance Company reserves the right to call for these documents at any point of time. The acknowledgement slip may be made into an acknowledgement slip-cum- certificate of insurance. The experience of the scheme will be monitored on yearly basis for re- calibration etc., as may be necessary. Appropriation of Full Annual Rs.258/- Rs.172/- Rs.86/- is Premium: Appropriation Premium of collected in collected in the collected in of Premium Where: Rs.330/- the 2nd 3rd quarter of the 4th collected quarter of risk risk period quarter of Period risk period 01 Insurance Rs.289/- Rs.225/- Rs.150/- Rs.75/- Premium to LIC/ Insurance Company 02 Reimbursement of Rs. 11/- Rs.10.50 Rs.7/- Rs.3.50 Expenses to BC/Micro/Corporat e/ Agent 03 Reimbursement of Rs.30/- Rs.22.50 Rs.15/- Rs.7.50 Administrative Expenses to participating Banks
Agricultural Finance Our economy is basically an agricultural economy. Nearly 70% of our population depend upon agriculture. In the 50s and 60s our country imported food products and milk products. The successive five year plans embarked upon the green revolution and white revolution for which modernisation and mechanisation of agriculture and allied activities was a must and that needed finance. In this context the major banks were nationalised and agricultural finance became one of the major portions of directed credit. Specialised agricultural credit departments and banks were opened for catering to this purpose.
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Agricultural Finance: FARM CREDIT Loans to individual farmers such as Crop loan, SHGs, JLGs, Dairy, Fishery, Animal Husbandry, Poultry, bee keeping, sericulture, Horticulture etc. Term loan for purchase of agri. Implements, equipment, irrigation, pre & post harvesting activities, transportation of farm produce. Loan up to Rs.50 lakhs against pledge of warehouse receipt, for a period not exceeding 12 months. Loan to distressed farmers indebted to non-institutional lenders. Loan to farmers in Kisan Credit Card Scheme. Loan to small and marginal farmers for purchase of land for agriculture purpose. Loans to corporate farmers, farmer producer organizations/ companies of individual farmers, partnership firms and co-op. of farmers directly engaged in agri. Activities etc. AGRICULTURE INFRA STRUCTURE Loan for construction of storage facilities including cold storage units/cold storage chains irrespective of locations, Soil conservation and watershed development, Tissue culture and biotechnology seed production, production of bio-pesticides, bio-fertilizers, vermicomposting. Aggregate sanction limit of 100 crs./borrower. ANCILLIARY ACTIVITIES Loan up to Rs.5 crs to co-op societies of farmers for disposing of produce of members. Loan for setting up of Agro Clinic and Agro Business centers. Loan for food and agro processing centers up to Rs.100 crs/borrower. Loan to PACS, FSS, LAMPS. Outstanding deposits under RIDF, eligible funds with NABARD
Selected Allied Activities under Agricultural Financing- Dry-Land Farming –Dry land farming means raising of crops in an area where the rainfall is less than 20" or 500mm. About 70 percent of the total cultivated area in our country is dry land and they contribute only 42 percent of the total food grains production in the country. In-spite of all the adverse features, these areas offer wide scope to increase the food production if the following techniques are adopted- i) Soil and water conservation techniques. ii) Use of drought resistance variety of crops. iii) Crops which are of short duration and high yielding. iv) Development of water-sheds etc.
Dairy Farming-Purpose: • Establishment of Mini dairy unit (with 2 to 4 animals), Small dairy unit ( 6 to 10 animals) Commercial dairy unit ( More than 10 animals) • Establishment of new medium/large dairy units or expansion of existing units by experienced, trained/qualified entrepreneurs as a main occupation • Collection, processing and distribution of milk. Manufacturing of milk products and other related business. • Establishment of breeding bull farms, semen banks, artificial insemination centres, veterinary clinics as custom service units. The following activities are eligible for finance under dairy schemes:
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• Purchase of improved/cross breed milch cattle • Purchase of breeding bulls in case of large schemes • Construction of cattle shed. The cattle which are in good health need to be selected. Animals should have low maturity age, long lactation period (i.e. more number of milking days) and high milk yielding per lactation period.
Other documents such as loan application forms, security aspects, margin money requirements etc. are also examined. A field visit to the scheme area is undertaken for conducting a techno-economic feasibility study for appraisal of the scheme.
In case of Cross bred cows the milk yield per day is about 12-15 litters, with length of the lactation period being 280 to 310 days and dry days being 150-180 days. Some of the important cross bred cows are Holstein Friesian, Jersey, Brown Swiss, Swedish Red etc. In case of buffaloes, the milk yield per day are about 5-6 litres with length of the lactation period being 270-300 days and dry days being 150- 180 days. Some of the important buffalo breeds are Mehsana, Murrah, Jafrabadi, Surti and Nili-Ravi.
A small unit of 2 milch cattle is considered to be financially viable for a small farmer with a regular milk yield if animals are initially purchased with an interval of 6 months. The animals should be purchased after 30 days of second calving. The net income from the sale of milk can pay off the loan within 3 lactations.
Scheme can be covered under PMMY upto limit Rs.10.00 lakhs.
Working Capital Facility For Animal Husbandry And Fishery Borrowers Br.Cr.112/169 dated 11/03/2019 Union Govt. through its budget for 2018-19 has decided to extend KCC facility to animal husbandry farmers for their working capital requirement. In pursuance of that RBI has decided to extend KCC facility for activities related to animal husbandry and fisheries.
Eligibility: Farmer, dairy farmer either individual or joint borrower, JLG, SHG, tenant farmers having own/ leased/ rented shed.
Scale of Finance: Working capital components in scale of finance include recurring cost towards feeding, veterinary aid, labour, water & electricity charges. Maximum period for assessment of working capital is one production cycle.
Poultry Farming-The two major commercial activities taken up by farmers under poultry farming are broiler farming and layer farming. In broiler operation, one day old chicks are grown for a period up to 6-7 weeks and thereafter are sold for meat purposes. The live weight of broilers at 6-7 weeks is about 1.8 kg. A farmer can take up 5-6 batches of broilers in a year. In layer operation, farmers generally purchase one day old chicks and rear it, till the birds give eggs at economical
Vijeta – March 2020 Page | 89 rates. The laying period commences around 21st week and is normally considered economical upto 72 (20 + 52) weeks. Today’s genetically superior poultry birds lay about 270 to 300 eggs in a year, which is about 9 to 10 times its own weight. Bank has come out with comprehensive ready reference guidelines on Poultry Farming to facilitate branches to entertain this credit business: • Small Poultry Units up to 10,000 birds should be discouraged for financing except, under Govt. sponsored schemes. Even under Govt. sponsored schemes, for units with less than 10,000 birds, efforts should be made for adoption of cluster approach. • All New Projects with 10,000 Birds & above should incorporate/ adhere to various stipulations laid down in the revised poultry policy guidelines.
Fishing & Aquaculture- The main stages involved in taking up an aquaculture enterprise are as follows: a) Selection of suitable site. b) Design and construction of farm. c) Pond preparation. d) Selective stocking of fishes. e) Supplementary feeding and water quality management. f) Harvesting and marketing. At present all aqua culture farms should register and obtain permission from Aqua Culture Authorities of India to carry out their farm activities within Coastal Regulation Zone (CRZ), adopting only traditional & improved traditional systems of shrimp farming.
Sericulture - Sericulture, the technique of silk production is an agroindustry, playing an imminent role in the rural economy of India. Sericulture is a highly labour-intensive activity. Silk production consists of 4 distinct phases of activities, viz., i) Cultivation of host plant. ii) Rearing of silk worms up to cocoon stage. iii) Reeling of cocoons into continuous filaments called raw-silk & iv) Silk processing and weaving.
Item number i) and ii) are considered under direct finance to Agriculture and item iii) and iv) are treated as SME finance. Four to five cocoon crops can be taken in a year under tropical conditions, which ensures periodic income at short intervals. The market for the end product is readily available and the prices are attractive. It has also got good export potential. Crop loan can be given for Tuti plantation under KCC and Term Loan can be given for Shed House for rearing of Silk Worms upto Cocoon stage. This scheme can be covered under PMMY upto Rs. 10.00 lakhs.
Vermi Culture (Vermi Composting)-Vermi stands for earthworms. Vermi compost is prepared by subjecting organic matter to decomposition with help of earth worms. From vermi culture, we get well decomposed worm casts which can be used as manure for crops, etc. In the process, earth worms also get multiplied. The excess worms can be converted into vermi protein (poultry feed, fish feed) or Vijeta – March 2020 Page | 90 vermi wash (spray on crops). Vermi compost technology has promising potential to meet manure requirement and in converting agro wastes/city garbage into valuable agricultural input. Farm Mechanisation-It is not the use of tractor alone but also includes use of other improved machinery viz., threshers, combine harvester, sprayers, dusters, power tillers, post-harvest processing machines etc. for improving production, productivity and enables the farmer to carry out the particular operation in lesser time and with lesser cost. Power driven machinery for carrying out various agricultural operations such as ploughing, harvesting, land levelling etc. along with transportation with horsepower more than 12 H.P. is known as tractor and machinery less than 12 H.P. is known as power tiller. Cultivator should have minimum 8 acres of perennially irrigated land to make utilisation of tractor viable. Zonal Managers can sanction farmers with 5 acres of land as a deviation based on viability of the proposition. Bank also finances for second hand tractor or repairs of machinery financed by the bank earlier, with some stipulations. The minimum acreage norms for financing tractor/power tiller can be relaxed at Zonal Office level on the basis of deposits pledged, custom hiring, value of the account, etc. We also finance Agro service centres run by Agri. Graduates / technically qualified persons besides State Govt. undertakings and corporations engaged in financing Agricultural activities. The Farm Mechanisation project is based on Techno-financial viability of the project Viz. suitability of the machinery/implements to the soil topography, climate, crops, scope for custom hire, availability of fuel, service centres. The economic viability includes capital cost and working expenses vis-à-vis expected incremental income/fair return on their investments. The maximum margin money is 25% depending on the activity taken by the farmer. Since NABARD has discontinued the system of sending approved list of Tractors we have to finance those brands of Tractors which has been given favourable Commercial Test Reports issued by the Central Farm Machinery Training & Testing Institute, Budni (M.P). We have also made Tie-up arrangements with leading Tractor manufacturing companies for financing as per farmer’s choice. Head Office (Rural) sends the list from time to time. The repayment period varies from 3-9 years depending on the activity selected by the borrower. The small and marginal farmers should be encouraged to purchase Power Tillers on the basis of their land holding instead of tractor to avoid heavy loan burden/less incremental income.
Drip, Sprinkler and Lift Irrigation System-The design, the equipment and technique of replenishing the Soil Water deficit by applying irrigation water is referred to as “Irrigation System”. Some of the irrigation systems are surface irrigation system, drip irrigation system, sprinkler irrigation system and subsoil irrigation system.
Drip Irrigation-It involves slow application of water, drop by drop, as the name signifies, to the root zone of crop. In this method, water is used very economically since losses due to deep percolation are reduced to a minimum. In most of the States subsidy is available for this investment.
Sprinkler Irrigation system-Is a system in which water is applied to the surface of any crop or soil in the form of a thin spray from above. This method can be adopted in almost all crops and is very popular in case of cash crops and some Vijeta – March 2020 Page | 91 orchard crops. This system is specifically suited to uneven topography where levelling is not practicable and in areas where water and labour are scarce.
Lift Irrigation system-In this system water is lifted from low level water reservoirs such as wells, lake and river. Horizontal and turbine pumps are used for raising water for irrigation. Pipe lines are laid for carrying water from river beds to distant area which is located on the high side of the river. Permission from the appropriate authority is required before financing under this scheme.
Solar Pump-This is the present trend in energisation of the pumps. Here solar photovoltaic cells are installed and connected to the electric pumps, its green solutions, having very little expense for maintenance. Ministry of NRES gives subsidy for installation of these pumps. We should encourage such investments as solar power is abundant in India.
Credit Cards under Agricultural Financials- The various innovative card products (Agricultural Advances) that are introduced by Bank in the recent past are: 1. Kisan Credit Card (KCC); 2. Star Bhumiheen Kisan Card (Star BKC) 3. BOI Satabadi Krishi Vikas Card 4. Kisan Samadhan Card;
Kisan Credit Card (KCC): (Br.Cr.112/55 dated 17/07/2018) A RUPAY credit card is issued for availing the limit. Passbook will contain the name, address, particulars of land holding, borrowing limit/sub limits, validity period etc. Credit Limit: Entire production credit requirements of the farmer for the full year, including the credit requirements for the ancillary activities related to crop production such as maintenance of agricultural machinery/implements, electricity charges etc., are taken into consideration and 10% of limit towards escalation in scale of finance for every year (2nd, 3rd, 4th, 5th year) is added, thus total requirement of credit for five years is calculated, accordingly documents are also obtained for full amount of five years.. The KCCs has interest subvention. As per the recent norms of Govt. of India, interest subvention is not available to maintenance portion of KCC limit. This is has to kept in mind while arriving at KCC limit. Type of Facility • Revolving cash credit: - No restrictions on number of drawls and repayment within the sanctioned limit. • Entire repayment once in a year, exception crops like sugarcane and banana crops in 18 to 24 months. Margin: Up to Rs.1,60,000/-* : Nil (*Amount of loan net of subsidy) Above Rs. 1,60,000/- : 15-25% Security: D. P. Note & - Up to Rs.1,60,000/-*: Hypothecation of crops /movable assets (*Amount of loan net of subsidy) Vijeta – March 2020 Page | 92
Above Rs.1,60,000/- : Hypothecation of crops/ movable asset and Mortgage of Land or Collateral security of adequate worth. Interest Rate – As notified by the Bank from time to time. Insurance i) Crop insurance for the notified crops in the notified area under PMFBY. ii) Personal Accident Insurance Scheme for the card holder sum assured – Death/permanent disability : Rs.50,000/-
Star Bhumiheen Kissan Card (SBKC): Documents Required i) Documents related to house of the applicant, ii) Ration Card, and iii) Voters’ list/Identity card. iv) Aadhaar card
Purpose Purchase of improved seeds, manures and fertilisers, plant protection materials, payment of hire charges for tractors, irrigation charges, electricity charges etc. and also meeting part of consumption needs. Limit i) Based on land area taken on tenancy for share cropping or on oral lease and scale of finance, maximum Rs50000/- ii) Additional Rs.5000/- for consumption needs, iii) Upon satisfactory conduct of the account for three years, the limit may be enhanced, if requested by the card holder. Issue of Cards-The farmers under the scheme will be issued a credit card- cum-pass-book incorporating the name, address, photograph, borrowing limit/sub-limits, validity period, etc. to facilitate recording of the transactions on an on-going basis. Sanctioning Authority: As per delegation of powers.
Type of Facility • Revolving cash credit – Annual Review. The farmer should be allowed for any number of drawals and repayment within the limit. • The aggregate credits into the account during the 12 month period should at least be equal to the maximum outstanding in the account, • No drawal in the account should remain outstanding for more than 12 months in case of normal crops and 18 months in case of sugarcane and banana crops. • In case of re-schedulement of the period of repayment on account of natural calamities affecting the farmer, the period for reckoning the status of operations as satisfactory or otherwise would get extended together with the extended amount of limit. When the proposed extension is beyond one crop season, the aggregate of debits for which extension is granted should be transferred to a separate term loan account with stipulation for repayment in instalments as per existing guidelines.
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Margin: Nil Security: Hypothecation of standing crop Repayment- The sale proceeds should be routed through the cash credit account. Market linkages, wherever possible, should be ensured.
Other Operational Guidelines • If a farmer has obtained short term finance from other bank/co- operative society, such farmer should not be issued Star BKC. • Wherever crop insurance is available, coverage needs to be obtained. • In case of default, the special facilities under the scheme should be immediately withdrawn and the limit should be treated as normal crop finance which would broadly mean:- o Withdrawal of cheque book facility (if issued) o Future disbursement on regularisation of account against bills/receipts. o Withdrawal of card (those who have been issued plastic cards) Application of Prudential Norms-The Star BKC facility being in the nature of cash credit accommodation for agricultural purposes, the prudential norms as applicable to such facilities would apply to the BKC accounts. In other words, the credit card account would be deemed to be a Non-Performing Asset (NPA) if it remains out of order for a period of two crop seasons/one crop season (as the case may be, depending on the duration of the crops) after the repayment due date.
Composite Cash Credit (CCC) Scheme-With a view to simplify procedures for the benefit of farmers and also reduce paper work as well as number of Borrowal accounts at the Branch level, Bank had introduced a system of Annual Composite Cash Credit (CCC) Scheme. The salient features of the “CCC” Scheme are:
Facility: Demand Composite Cash Credit - Annual Review. Eligibility: • Individual farmers, registered partnership firms, companies, registered farming, co-operative societies owning agricultural land, registered tenants / share croppers with recorded rights. • Only farmers engaged in production of crops produce suitable for storage in the cold storage / warehouse godown / regulated market yard are eligible for finance against storage receipt. • Farmers who have availed of crop loans from the bank for raising the concerned crop in that season are eligible for finance under produce marketing loan scheme. Quantum of finance / margin • For production / short term purposes: Loan amount will depend upon the type of crop, area under cultivation and scale of finance. • Short Term Working Capital. • For ancillary activities. • For minor investment of medium term nature.
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• Short Term Credit for consumption / domestic needs to the extent of maximum 25 percent of gross estimated income of the farmer. • Finance against storage receipts / produce marketing may be considered maximum up to 50 percent of the price of the produce prevailing at the time of storage/sanction of loan and the maximum loan limit should not exceed Rs.10.00 lakh per farmer for a maximum period of 12 months. Rate of Interest: • On Debit Balance: As per RBI Guidelines as applicable to crop loans. • On Credit Balance: Rate of Interest payable will be as per SB interest rate & to follow SB 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. Security is as applicable to Agricultural Advances. 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. –Up to Rs.1,60,000 : Hyp. of crops/other movable assets –Above Rs.1,60,000 : Hyp. and mortgage of land or collateral securities. Margin: For loans up to Rs. 1,60,000/- Nil For loans above Rs. 1,60000/- 15 – 25% Disbursement: • Up to Rs. 25,000/- may be disbursed in cash to the borrower. • Above Rs.25,000/- may be disbursed through input suppliers or against bills / receipts or may be waived at the discretion of the Manager / Sanctioning Authority.
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. The methodology of arriving at the composite cash credit limit is by assessing the “total family income based on crop production and other allied / non- farm activities.” Fixing reasonable credit limit, to take care of:
(i) Short term production requirements. (ii) Minor investment of medium term nature & (iii) Domestic consumption needs. While (i) & (ii) can be calculated easily, the domestic consumption needs can be worked out as a thumb rate on the basis of 15% to 20% of total gross family income of the farmer. Improved supervision & closer monitoring are inherent components of the successful implementation of the scheme.
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ADVANCES AGAINST THE SECURITY OF GOLD ORNAMENTS /GOLD COINS AND OTHER JEWELLERY – STAR GOLD(Br.Cr.111/127 dated17/11/2017) Strategic Necessity of Gold Loan Portfolio under Priority Sector 1) Indian Society considers gold as a symbol of prosperity. Traditionally, gold has been perceived as safest asset during the periods of financial and economic stress. 2) Demand for gold is mainly driven by jewellery demand rather than by investment or industrial demand. 3) It can be instantly liquidated either by disposing off or by availing loan against the security of gold in emergent circumstances. 4) By extending zero risk weighted advances, we shall conserve the capital by extending gold loan. Gold loans are given for agriculture purpose, business purpose or consumption purpose. In the first two cases, the loans will fall in the Basel “Regulatory Retail” Asset class (RW 75%) and in the third case, “Consumer Credit” (RW 125%). Notwithstanding above, because of the sufficient margin (130%) available in these accounts the Net exposure is always NIL and consequently RWA is zero. Thus there is no capital charge on these loans. 5) Branches should ensure that at any point of time LTV should not be more than prescribed by RBI. ELIGIBILITY: Any individual owning gold ornaments/coins, either singly or jointly, who maintains KYC compliant SB/CD account with the branch. 1) Gold loan may be sanctioned to bank’s staff including staff posted at Zonal Office and Head Office as well as their spouse, by branch manager without taking prior sanction of Zonal office. 2) When branch is giving loan against bank’s gold coin, then branch should ensure that weight of gold coin should not exceed 50gms per customer. 3) For advance against gold belonging to the wife as ‘stridhan’, then wife should also be made as co-borrower. Waiver of this stipulation should be considered by Zonal Manager level. 4) No advance should be against the ornaments with names inscribed of the parties other than borrowers. 5) Borrowers under Debt Swap (as per Br. Circ107/14 dated 16.04.2013) can also be covered up to Rs.25,000/- only. 6) Distressed farmers to repay non-institutional lenders, tenant cultivators and lessee farmers are also eligible. 7) Defaulters from any bank are not eligible.
PURPOSE: 1) Agriculture: for meeting crop production expenses like crop loan (eligible for interest subvention if gold loan sanctioned as KCC limit), farm house, rural go down, cold storage/chain, allied activities like dairy, goatery, poultry, fisheries etc. Loan will be sanctioned as per declaration of borrow in annexure IV & IV(a). 2) Other Priority Sector: Gold loan can be sanctioned for all eligible activities under Other Priority Sector. Typical requirements under OPS is working capital cycle for business unit, pety trade, purchase of raw material or equipment, furnishing business premises, furniture
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& fixture, repairs of house. Loan amount will be sanctioned based on the declaration of the applicant. 3) Non-priority/ consumption loan: To meet unforeseen expenses, contingencies, expenses for medical treatment, for marriage and other ceremonies, expenses for education/ business not under priority sector. Loan amount will be sanctioned based on the declaration of the applicant. 4) Gold loan will not be covered under CGTMSE.
Turn Around Time: For new gold loan or redemption of loan, TAT shouldn’t be more than 15-25 minutes. ASSESSMENT OF LOAN AMOUNT: Assessment of loan should be done by any of the following methods:- 1) Loan amount requested by applicant/assessed amount on declaration OR 2) Loan to Value (LTV) as under i) 75% of appraised value of gold ornaments of 22 carat fitness for short term loan not exceeding 12 months. ii) 70% of appraised value of gold ornaments of 22 carat fitness for term loan above one year but not exceeding 2 years. iii) 60% of appraised value of gold ornaments of 22 carat fitness for term loan above two year but not exceeding 3 years. OR 3) Loan amount assessed based on scale of finance for crop production/ actual amount of credit requirement for other than crop production, as the case may be. WHICHEVER IS LOWER Specially minted gold coins sold by any bank (24 carat) shall be treated as gold ornament for the Purpose of assessment of gold loan. Loan amount to be assessed based on the price of gold uploaded on the bank’s website. VALUATION OF GOLD ORNAMENTS AND COINS: o For the purpose of valuation gold jewelry should be of 22-24 carats as per certificate issued by the o Empaneled Gold Smith. o Bank will not finance against the jewelry of 18 carats. o In CBS system, gold rate of the bank can be viewed through menu “GOLDLNRT” o SECOND APPRAISAL OF GOLD JEWELLERY :- Branch where gold loan portfolio is above Rs.20 crores, o Then for all loan applications above Rs. 3 lakhs will require second appraisal as per given revaluation. o TYPE OF FACILITY : Demand Loan/ Term Loan/Overdraft facility/Cash-Credit
QUANTUM OF LOAN: A) For Agriculture / MSME / Retail and other priority sector activities Minimum Loan: no minimum ceiling Maximum Loan: Rs.15 lakhs (can be raised up to Rs.25 lakhs in specific zones as designated by GM, NBG up on suitable assessment.)
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B) For other purposes: Minimum Loan: no minimum ceiling Maximum Loan: Rs.10 lakhs C) Loan below Rs.1 lakh: These small loans are generally given to marginal & small farmers, small scale tenant agriculturist, petty traders-cum-farmers, farmers doing allied activities, farmers for maintaining farm lands, houses, storages, food & agro processing units etc. These loans are given on the basis of declaration duly signed by the borrower. Note:- Branch should obtain copies of land records, revenue receipts, documents and cultivation details for loan over Rs.1 lakh. D) Partial release/top up of gold loan: Depending upon value of security, in case borrower repays part amount of gold loan, branch may top-up or part release, considering a new loan along with fresh application and fresh valuation certificate to be obtained for top-up or new loan.
RATE OF INTEREST:
As per Bank’s guidelines and sector wise applicable ROI.
DOCUMENTATION: 1) For limits up to Rs.1 lakh a) Application-cum-Valuation-cum-sanction letter b) D.P. note c) AG-35 unstamped d) Undertaking-cum-declaration for gold loan up to Rs.1 lakh for agriculture purpose only. 2) For limit above Rs.1 lakh a) Application-cum-Valuation-cum-sanction letter b) D.P. note c) AG-35 stamped d) Undertaking-cum-declaration for gold loan above Rs.1 lakh for agriculture purpose only. Copy of land document, latest land revenue receipt, cultivation details should be obtained.
SECURITY: Pledge of gold ornaments/ jewellery/ gold coin
SERVICE CHARGES: A) No documentation, inspection, prepayment charges B) Processing charges a) Agriculture Gold loan i) Up to Rs.1 lakh – NIL ii) Over Rs.1 lakh to Rs.5 lakh: Rs.150/- per lakh Max. Rs.300/- iii) Over Rs.5 lakh : Rs. 150 per lakh b) MSME/OPS loans- i) Loan upto Rs.1 lakh : Nil ii) Over Rs.1 lakh : Rs.150/- per lakh
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Sanctioning Authority:- Scale- I Rs. 4 lakhs Scale II Rs. 10 lakhs Scale III & Above Full Powers.
Valuation charges:- Rs.5/- per Rs.1000/- of loan amount Min. Rs.100/- Max.Rs.500/- per valuation.
PRUDENTIAL NORMS Loans granted for Agriculture purpose. The accounts will become NPA if installment of principal or interest thereon remains overdue for 2 crop seasons for short term crops and one crop season for long term crops, provided facility financed for:- Raising crops Production & Investment of agriculture. Purchase of land for Agr. purpose by SF/MF. Distressed farmers to repay debt to non-institutional lenders. Taking up pre/post-harvest activities.
Loans granted for other than Agriculture:
Overdue for > 90 days - Become Sub Standard asset and if prescribed margin by RBI i.e. 25% is not maintained as per the card rate applicable from time to time then the a/c become NPA before the due date. (Ref.Br.Cir.No: 107/187 dt. 11.01.2014)
Over Draft/Cash Credit:
NPA if o/s remains continuously in excess of SL or no credits continuously for more than 90 days or credits are not enough to cover the interest debited for the same period.
Other Aspects in Agricultural Financing Scale of Finance-Short Term Credit is granted for meeting the current expenditure in connection with raising of crops and is, therefore, known as Crop Loan. An essential feature of crop loan system is that a cultivator’s eligibility for a loan and the size of the loan are determined not with reference to the value of land or any other tangible security, but on the basis of the size of the land holding that he cultivates and the cost of cultivation of crops which the farmer proposes to grow.
Category of borrowers Margin i) Up to Rs.1,60,000/-All borrowers Nil ii) Over Rs.1,60,000/- All borrowers 15% to 25% Notes: • Short Term Loans include Crop Loans/Working Capital Loans for allied activities.
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• Margin in case of crop finance need not be in cash. The cost of labour of the farmer and his family and the cost of their inputs not financed by the Bank can constitute margin. • The quantum of crop loans should be worked out on the basis of scale of finance approved by District Level Technical Committee for each crop. • Where subsidy is available, same should be treated as margin and no further margin money should be insisted in the above-mentioned margin norms except as provided in respective subsidy oriental schemes like cold storage/rural godowns/hi-tech agri. products where subsidy is back ended. Hence, normal margin needs to be maintained in such schemes except employment oriented/Government sponsored schemes like PMRY, SGSY, etc.
Security: Type of Credit Loan Amount Security to be obtained A. Crop Loans a) Up to Rs. 1,60,000/- - i) D. P. Note ii) Hypothecation of Crops/ Stocks b) Over Rs. 1,60,000/- i) Hypothecation of crops/stocks and ii) Mortgage of land OR Declaration as per State Ag. credit Act OR iii)Collateral Security of Adequate worth. B. Terms Loans i) Where movable assets are created a) Up to Rs. 1,60,000/- i) Hypothecation of assets created out of bank loan. b) Over Rs. 1,60,000/- i) Hypothecation of assets created out of bank loan and ii) Mortgage of land OR Declaration as per Agricultural Credit Act OR iii) Collateral Security of adequate worth.
ii) Where movable assets are not created a) Up to Rs. 1,60,000/- i) Term Loan Agreement
b) Over Rs. 1,60,000/- i) Term Loan Agreement and
ii) Mortgage of land
OR
Declaration as per State Ag. credit Act
OR
iii) Collateral security of adequate worth.
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Notes: Zonal Managers may permit waiver of this security only in deserving cases, provided suitable third party guarantee/s of adequate worth could be obtained. As the third party guarantee in lieu of mortgage/charge on immovable property or collateral security may be taken for loans above Rs. 160,000/-, Branches/approving authority should carefully examine and be satisfied with the antecedents and acceptability of the guarantors before accepting their guarantees. Normally, care should be taken to avoid guarantor/s who is/are close relative/s of borrower/s. • In case of tractor/power tiller advances, relaxation in respect of eligibility criteria on minimum land holding/mortgage of land/immovable properties may be permitted on merits by the Zonal Manager and above authorities, as per prevailing practices. • In all other cases of Agricultural Advances not specified herein, i.e. ‘where movable assets are not created’, Zonal Manager may permit the waiver of Mortgage of immovable properties / land depending upon the genuineness / merits of the borrower/s. This relaxation should be used judiciously and in exceptional cases.” • In states where legislation on the lines of Talwar Committee recommendations has come into force, the branches may obtain the declaration as per State Agriculture Credit Act in lieu of mortgage as follows: (i) In states where declaration and mortgage attract stamp duty at same rate, mortgage of immovable property should be insisted upon. However, if declaration attracts stamp duty at lower rate than that of legal/ equitable mortgage, creation of charge by declaration may be resorted to. (ii) If stamp duty is exempted on declaration of and not on mortgage, declaration for creating charge may be obtained upto exemption limit, if any, prescribed under respective Act. • In states where Agriculture Credit Act has not come into force, legal or equitable mortgage must be obtained, wherever mortgage of land is stipulated. • Security norms for agricultural advances granted under centrally sponsored schemes will be governed by those stipulated for such schemes. • For advances over Rs.160,000/- where movable assets are not created, it is desirable to obtain mortgage of land as a principal security even though it is not explicitly prescribed. • In case of indirect finance to agriculture, margin and security norms as applicable to commercial advances, are to be followed. Non-encumbrance certificate should not be insisted upon where the land is not taken as security, However, where the land is stipulated as security, non-encumbrance certificate/ search should be taken as follows: (i) For Direct & Indirect Agricultural Advances with Limits upto Rs.100 lakhs (w.e.f. 19.1.2000) the search period stipulated is 13 years. (ii) For Limits over Rs.100 lakhs the stipulated search period is 30 years.
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The Branch Lawyer’s report on title and certificate that the borrower’s title to the land is clear, marketable and free from encumbrances is also essential. Where assets are created out of bank loan, security for such loans up to Rs. 160,000/-, should be only the assets created out of the loan. Taking of gold articles/ jewellery or any other property as collateral security or third party guarantee for such agricultural loans is not necessary and should not be insisted upon as a pre-condition for grant of such loan. The extracts/ certificates which are essentially required to be produced along with the application forms are: Extracts of Record of Rights & No Dues Certificate.
PRADHAN MANTRI FASAL BIMA YOJNA PMFBY will provide a comprehensive insurance cover against failure of the crop thus helping in mitigating risk, stabilising the income of the farmers and encourage them for adoption of innovative practices. The scheme is compulsory for loanee farmer obtaining Crop Loan /KCC account for notified crops. However, voluntary for Other/non loanee farmers who have insurable interest in the insured crop(s). The Maximum Premium payable by the farmers will be 2% for all Kharif Food & Oilseeds crops, 1.5% for Rabi Food & Oilseeds crops and 5% for Annual Commercial/ Horticultural Crops. The difference between premium and the rate of Insurance charges payable by farmers shall be shared equally by the Centre and State. The seasonality discipline shall be same for loanee and non-loanee farmers. The scheme will be implemented by AIC and other empanelled private general insurance companies. Selection of Implementing Agency (IA) will be done by the concerned State Government through bidding. The existing State Level Co-ordination Committee on Crop Insurance (SLCCCI), Sub-Committee to SLCCCI, District Level Monitoring Committee (DLMC) shall be responsible for proper management of the Scheme. The Scheme shall be implemented on an 'Area Approach basis'. The unit of insurance shall be Village, village Panchayat level for major crops and for other crops it may be a unit of size above the level of Village, village Panchayat. The Loss assessment for crop losses due to non-preventable natural risks will be on Area approach. In case of majority of insured crops of a notified area are prevented from sowing/ planting the insured crops due to adverse weather conditions that will be eligible for indemnity claims up to maximum of 25% of the sum-insured. However losses due to localised perils (Hailstorm, landslide & inundation) and Post-Harvest losses due to specified perils, (Cyclone/Cyclonic rain & Unseasonal rains) shall be assessed at the affected insured field of the individual insured farmer. Three levels of Indemnity, viz., 70%, 80% and 90% corresponding to crop Risk in the areas shall be available for all crops. The Threshold Yield (TY) shall be the benchmark yield level at which
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Insurance protection shall be given to all the insured farmers in an Insurance Unit Threshold of the notified crop will be moving average of yield of last seven years excluding yield upto two notified calamity years multiplied by Indemnity level. In case of smaller States, the whole State shall be assigned to one Insurance Agency (IA), 2-3 for comparatively big States. Selection of IA may be made for at least 3 years. SMALL FARMERS AGRO-BUSINESS CONSORTIUM (SFAC) It is a Central Sector Scheme named as :- EQUITY GRANT AND CREDIT GUARANTEE FUND SCHEME FOR FARMER PRODUCER COMPANIES (FPCs)
o Farmer Producer Companies (FPC) which are registered after 1st January 2014 are eligible for the scheme. o SFAC to provide equity grant to FPCs equivalent to the amount of shareholders equity, max Rs.15 lakhs/FPC o Credit guarantee fund operated by SFAC to provide 85% insurance cover to all FPC loans up to sanction limit Rs.100 lakhs. o Loan sanctioned as per the scheme is to be classified under agriculture infrastructure.
1) Eligibility: Farmer Producer Company should be registered under Indian Companies Act 1956, Section- IX A and incorporated with Registrar of Companies (ROC). The number of shareholders should be minimum 500.
2) 33% of shareholders should be small, marginal and landless tenant farmers.
3) Maximum shareholding by any member other than institutional member should not be more than 5% of total equity of the FPC.
4) FPC should have elected/nominated Board with a minimum 5 members and should have adequate representation of farmers and minimum 1 woman member.
o FPC should have duly elected Management Board. FPC should have a business plan and budget for 18 months. Bank/ Eligible Lending Institution (ELI) has extended/ sanctioned within 6 months of the date of application for the Guarantee or / in principle agree in writing has expressed willingness to sanction Term Loan/ Working capital/ Composite Credit Facility without any collateral security or third party guarantee including personal guarantee of board members. Bank shall consider all activities related to direct/ indirect agriculture undertaken by the FPCs. o Credit facilities (Fund based and /or non-fund based) already sanctioned / extended within six months from the date of application for Guarantee cover or intended to be extended singly or jointly by one or more than one ELI, to a single FPC borrower by way of TL/Working Capital/Composite credit facilities without any collateral security and or third party guarantees. Vijeta – March 2020 Page | 103
o Bank can extend credit limit up to Rs.100 lakhs without any collateral security and/or third party guarantees. Security:
Under the scheme Bank has to extend credit facility to FPC without any collateral security and / or third party guarantee up to limit of Rs.1 crore. However primary security like hypothecation, pledge, mortgage, assignment etc. should be obtained as extant norms of the Bank. Credit Guarantee Cover:
It is available to FPC borrower for maximum 2 times in the span of 5 years. Maximum guarantee cover available is 85% of the eligible sanctioned credit facility or Rs.85 lakhs, whichever is lower. In case of default, claim shall be settled up to 85% of the amount in default subjected to max. cover of the scheme. Guarantee Fee:
0.85% of the credit facility sanctioned subjected to max. Rs.85000/-.
Annual Service Fee;
Annual service fee of 0.25% p.a. shall be charged to keep the guarantee of SFAC live. ELI or Bank shall bear the expenses of annual service fee, initially for 2 years in the new borrowal accounts. Guarantee fee and annual service fee once paid to SFAC is non-refundable except where guarantee cover is not approved. Invocation of Guarantee:
Condition one: If SFAC and Bank in their joint or independent assessment are convinced that the FPC has suffered losses, which are genuine such as crop or asset losses by the members and FPC is not in a position to repay dues in any circumstances including restructuring/ rephasing/ rescheduling the loan. Condition two : Bank should have initiated proceedings of recovery before invocation of guarantee.
Claim Settlement: 1) Bank should submit claim within one year from the date of NPA or as specified by the SFAC from time to time.
2) SFAC shall honour 75% of the guaranteed amount in default, subjected to a max. 75 % of the guaranteed cap amount, on submission of claim by the Bank where appropriate action for recovery is initiated.
3) Balance 25% of default shall be paid on conclusion of recovery proceedings by the bank
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Star Agriculture Infrastructure & Marketing Scheme. (AIMS) The scheme is approved for implementation from 22-10-2018 to 31- 03-2020. The erstwhile Gramin Bhandaran Yojana and scheme for Development/ strengthening of AMI are subsumed into AIMS. Aim of the scheme is to promote innovative and latest technologies in post-harvest and agriculture marketing infrastructure. To benefit the farmers individually and collectively through FPOs from farm level processing and marketing of processed produce. To promote creation of scientific storage capacity for storing of farm produce. To incentivize developing and upgrading of Gramin Hat. To promote pledge financing through electronic warehouse receipt system. Star AIMS will cover 1) processing infrastructure, ex:- mini oil expeller, mini dal mill, 2) Storage infrastructure, ex;- cold storage, godown(50-10000mt), deep freezer, zero energy freezer, pack house, ripening chamber 3) Development of farmers consumer market, 4) Linkage to marketing reforms. Scheme doesn’t include renovation of storage infrastructure.
Eligible beneficiaries:
a) For creation of storage infrastructure (50-5000mt) and non-storage infrastructure:- Individual, group of farmers, FPOs, FPCs, partnership/proprietorship firms, companies, NGOs, SHGs, cooperative marketing federations, Panchayats, APMCs, State Warehousing Corporations, State Civil Supplies Corporations etc. b) For development/upgradation of farmer-consumer market and Rural Hats/ Rural Primary Markets(RPMs): State Govt. agencies nominated by State Govt. for Rural Hat managed by Panchayat, APMCs, FPOs, FPCs, farmers, individuals, trustees etc. Sub-scheme AMI lays special emphasis on developing and upgrading the Gramin Hats as GrAMs through strengthening of infrastructure. These GrAMs may function as farmer consumer market and collection point with linkages to secondary market with participation of FPOs and other eligible promoters.
Promoters contribution and term loan:- Minimum promoters contribution should be 20% of the project cost. If it is less than 20%, then Actual Total Financial Outlay (TFO) of the project shall be restricted to 5 times of the promoters contribution on completion of the project, for the calculation of subsidy. Minimum term loan should be 50% of the project cost. The promoter’s contribution may vary from 20- 50% of TFO and term loan may vary from 50-80% of the TFO.
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Note: Promoter’s contribution for State Govt. Infrastructure Projects of the State Govt. agencies financed under RIDF, WIF of NABARD may be relaxed as per fund directives.
Promoter’s contribution in case of own funded state Govt. agency projects should be 75% / 66.67% of the project cost as the case may be.
Subsidy : 25% or 33.33% of the capital cost depending upon area and category of the beneficiary. Subsidy is back ended. HOBC 112\159 dated 12-02-2019.
Important Circulars:- 1) Priority Sector Lending – Master Circular—HOBC 112/180 date-16-03- 2019 2) KCC-- Master circular – HOBC 112/55 date – 17/07/2018 3) KCC –Master circular on Animal Husbandary & Fisheries—HOBC 112/169 date 11/03/2019 4) All Agriculture Proposal formats -- HOBC 110/192 date – 03/01/2017 5) Tatkal Loan – HOBC 106/117 date- 01/11/2017 6) PMMY in agriculture – HOBC 110/89 date 09/08/2016 7) Service charges Master Circular– HOBC 112/129 date 12/12/2018 w.e.f.15/01/2019 8) Credit facilities to SC/ST – Master Circular- HOBC 113/75 date 10/07/2019 9) Credit facilities to minorities – Master Circular- - HOBC 113/71 date 10/07/2019 10) PMMY- Master Circular – HOBC 109/63 date 24/06/2015 11) Day NRLM – Master Circular – HOBC 113/74 part I & II date 10/07/2019 12) Stand Up India – Master Circular – HOBC 110/51 27/05/2016 13) Star Start Up – Master Circular – HOBC 111/28 date 25/05/2017 14) Day NULM – Master Circular – HOBC 113/60 date 25/06/2019 15) Transaction Limit at BC outlet – HOBC 113/153 dated 14/10/2019 16) Amendment in BSBDS a/c – HOBC 113/157 dated 16/08/2019
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