Common Guidelines for Priority Sector Advances

1. PROCESSING OF APPLICAIONS
i. Completion of Application Forms:
In case of Government sponsored schemes such as SGSY, PMEGP, etc the
concerned sponsorin authorities li!e "#"A, "IC etc. should arrane for
completion of application forms received from $orro%ers. In other proposals, the
$ranch staff should help the $orro%ers to fill in the application form.
ii. Issue of Ac!no%ledement of &oan Applications
'ranches should issue ac!no%ledement for loan applications received from
$orro%ers under Priorit( sector and maintain record of the same.
iii. "isposal of Applications
All loan applications up to a credit limit of #s.).** la!h should $e disposed of
%ithin a fortniht and those for over #s.).** lacs, %ithin + %ee!s.
iv. #e,ection of Proposals
'ranch Manaers ma( re,ect applications -e.cept in respect of SC/S0,MSE1
provided the cases of re,ection are ratified su$se2uentl( $( the #eional Manaers.
In the case of proposals from SC/S0 and MSE cateor(, re,ection should $e at a
level hiher than that of 'ranch Manaer.
v. #eister of #e,ected Applications
A #eister should $e maintained at the $ranch, %herein the date of receipt
sanction/re,ection/dis$ursement %ith reasons thereof, etc., should $e recorded. 0he
reister should $e made availa$le to all inspectin aencies.
!. "#AN#$ OF LOAN%
i. It is intended that $oth term as %ell as short term/%or!in capital credit facilities
for Ariculture purposes %ill $e provided throuh sinle !isan credit card under
#evised 3isan credit Card Scheme in terms of 4.5 circular
no..PS:#CPP5"/67*/5M8*9+:/9;89; dated *+.*:.;*9;. 0he Card %ill $e issued
for the follo%in purposes:
short term credit for cultivation of short duration crops includin post
harvest e.penses, produce mar!etin loan, consumption re2uirement of
farmer household.
%or!in capital credit for activities allied to ariculture and also %or!in
capital re2uired for floriculture, horticulture, plantation crops etc.
term credit -repa(ment $e(ond 9; months1 for ariculture and allied
activities includin production of lon duration crops li!e suarcane,
$anana, pineapple, $eetle vine and other fruit and other plantation crops.
4o%ever, it is to $e ensured that transaction records of different loan facilities are
!ept distinct.
0he credit limit under the 3isan Credit Card ma( $e fi.ed as detailed in the a$ove
circular.
ii. 5ther loans for development/investment/ production purposes:
0he loan limit for development/investment/production purposes -"air(, poultr(,
fisher(, farm mechani<ation, minor irriation, plantation, etc1 ma( $e %or!ed
out on the $asis of unit costs indicated $( =A'A#"/ Concerned overnment
department/S&'C or on the $asis of realistic assessment $ased on the mar!et
value of inputs, assets to $e procured.
&. $O'E OF 'IS(#RSE$EN OF LOAN
>ith a vie% to providin farmers %ider choice as also eliminatin undesira$le
practices, $ranches ma( as far as practica$le dis$urse loans for aricultural
purposes in cash %hich %ill facilitate the $orro%ers to choice dealer and foster an
environment of trust. 4o%ever, $ranches ma( o$tain receipts from $orro%ers. In
case of 0ractor, Po%er tiller, machineries , vehicles , etc the pa(ment should $e
made directl( to the dealer $( "",P5, or $( %a( creditin to his account on the
$asis of invoice collected $( the farmer from the dealer of his choice and
su$mitted to the $an! %ith a dul( sined %ritten statement on the $od( of the
invoice that the invoice is collected and accepted $( him and the 'an! can ma!e
pa(ment directl( to the dealer $( de$itin his loan account.
). $ar*in Norms for a*ricultural advance%
i. &oan upto #s.9.** la!h : =il
ii. &oan a$ove #s.9.** la!h : 9) to ;) ?
iii. Marin ma( $e rela.ed to 9* ? %ith the approval of ne.t hiher authorit(.
4o%ever approval is not re2uired in case of 'an!@s Aricultural loan schemes
%here lo%er marin is allo%ed -such as Anited 3rishi Saha(a! Yo,ana, Anited
Gram(ashree (o,ana, etc1 or in case of an( overnment sponsored scheme %here
lo%er marin is stipulated in the scheme.
iv. Marin ma( $e %aived %here overnment su$sid( is availa$le.
+. Security Norms for a*ricultural advance%
Crop &oan:
&oan upto #s. 9.** la!h: 4(pothecation of crop
&oan a$ove #s. 9.** la!h: 4(pothecation of crop
Mortae of land or third part( uarantee
0erm loan:
&oan upto #s. 9.** la!h : 4(pothecation of assets created out of $an! loan
&oan a$ove #s. 9.** la!h: 4(pothecation of asset created out of $an! loan
Mortae of land or third part( uarantee.
In the states %here leislation on lines suested $( the 0al%ar committee has $een
passed, a simple declaration creatin a chare on the land offered as securit( %ill $e
sufficient. In such case no further mortae is re2uired.
,. (enc- $ar. Parameters for a*ricultural advance /Ne0 1 e2istin*3%
-a1 05&/0=> -"e$t E2uit( for term loan1 for various t(pes of e.posure should not
e.ceed the undernoted value -applica$le for limit a$ove #s.;) la!h1.
=ature of E.posure/$orro%er 05&/
0=>
"/E
#atio
#ela.ation ma( $e allo%ed
%ith the approval ne.t hiher
authorit( as per norms
mentioned in Para 9.9*.).a
of the &endin Polic(, Bol8II
05&/0=> "/E ratio
&oan for Ariculture and allied
activities -"irect ariculture1.
::9 ):9 7:9 ::9
Indirect ariculture %hich are purel(
tradin in nature such as loan to
dealers/distri$utors of Aril
machiner(, irriation s(stem , aril
inputs -li!e seed, fertili<er, pesticide,
cattle feed , poultr( feed, etc 1 , loan
to co8operatives for disposin aril
produce, etc.
+:9 C:9 ):9 +:9
Aro $ased processin unit +:9 C:9 ):9 +:9
Service oriented aricultural
activities li!e loan to set up custom
Service unit , loan for construction
and runnin of storae facilit( -%are
house , mar!et (ard, odo%n,
silos,etc1
::9 +:9 7:9 ):9

-$1 Asset Coverae #atio:
For loan amount upto #s. 9.** la!h, since no Marin and collateral securit(
should $e insisted upon, the $enchmar! of Asset coverae ratio %ill not $e
applica$le. 4o%ever loan should $e secured $( primar( securit(.
For loan amount a$ove #s.9.** la!h, it should at par %ith other advance as per
norms mentioned in the &endin Polic(.
-c1 For loan limit a$ove #s.;) la!h1, all other $ench mar! parameters should $e at par
%ith other advances as per the norms laid do%n in the &endin Polic(., Bol8I Para
+a +$ D +c.
-d1 Current ratio ma( $e rela.ed in aricultural activities %here ade2uate current asset
is not $uild up li!e loan for raisin of crops, orchards, plantation, etc.
-e1 'ench mar! parameters for advances to 0ea and Cold Storae %ill $e as per e.tant
uidelines issued $( the 'an! from time to time.
-f1 In case of aricultural loan upto #s. ;) la!h, it should $e sanctioned $ased on
marin norms and securit( norms as stated in &endin Polic(, technical feasi$ilit(
of the scheme and ade2uac( of income/incremental income from the scheme to
meet the repa(ment o$liation and the su$sistence need of the farmer/$orro%er.
4. REPA5$EN SC6E'#LE
#epa(ment schedule for term loan $e fi.ed ta!in into account the sustenance
re2uirements, surplus eneratin capacit(, the $rea!8even point, the life of the
asset, etc., and not in an Ead8hocF manner. In respect of composite loans, repa(ment
schedule ma( $e fi.ed for term loan component onl(. For 'oth short term loan and
term loan the repa(ment schedule should coincide %ith the time of harvest %ith a
reasona$le period of sale of produce.
7. RAES OF INERES
i. 0he rates of interest on various cateories of aricultural sector advances %ill $e as
per $an!s directives issued from time to time.
ii. - a 1 In respect of direct aricultural advances, $ranches should not compound the
interest in the case of current dues, i.e. crop loans and installments not fallen due in
respect of term loans, as the ariculturists do not have an( reular source of income
other than sale proceeds of their crops.
- $ 1 >hen crop loans or installments under terms loans $ecome overdue, $ranch
can add interest to the principal.
- c 1 >here the default is due to enuine reasons $ranches should e.tend the period
of loan or reschedule the installments under term loan. 5nce such a relief has $een
e.tended, the overdues $ecome current dues and $an!s should not compound
interest.
- d 1 'ranches should chare interest on aricultural advances in respect of lon
duration crops, at annual rests instead of 2uarterl( or loner rests, and could
compound the interest, if the loan/installment $ecomes overdue.
-e1 0otal interest de$ited to an account should not e.ceed the principal amount in
respect of short term advances to small and marinal farmers.
8. PENAL INERES
i. Penal interests that should $e levied for reasons such as default in repa(ment, non8
su$mission of financial statements, etc as per 'an!@s e.tant polic( uidelines for all
cateories of advances.
ii. =o penal interest should $e chared $( $an!s for loans under priorit( sector up to
#s.;),***.**.
19. SER:ICE C6ARGES;INSPECION C6ARGES
=o service chares/inspection chares should $e levied on priorit( sector loans up
to #s.;.** la!h.
For loans a$ove #s.;.** la!h, Service chares/inspection chares %ill $e levied as
per e.tant polic( uidelines of 'an! applica$le for all cateories of advance.
11. INS#RANCE AGAINS FIRE AN' O6ER RIS<S
i. Insurance of assets chared to $an! ma( $e %aived aainst fire and other ris!s for
all cateories of priorit( sector advances up to and inclusive of a limit of
#s.9*,***.**
ii. Insurance of e2uipment and current assets chared to $an! ma( $e %aived aainst
fire in respect of advances to Micro and Small Enterprises up to and inclusive of
#s.;)*** $( %a( of composite loans to artisans, villae and cottae industries, all
term loans, and %or!in capital %here these are aainst non8ha<ardous oods.
iii. >here, ho%ever, insurance of vehicle or machiner( or other e2uipment/assets is
compulsor( under the provisions of an( la% or %here such re2uirement is
stipulated in the refinance scheme of an( refinancin aenc( or as part of a
Government8sponsored prorammes such as SGSY and also for financin of
livestoc!, insurance should not $e %aived even if the relative credit facilit( does
not e.ceed #s.9*,***.** or #s.;)***/8 as the case ma( $e.
iv. In case of loanee farmers, the notified crops financed $( the $ranch should $e
mandatoril( insured under =ational Aricultural Insurance Scheme -=AIS1
/Modified =ational Aricultural Insurance Scheme -M=AIS1/>eather 'ased
Insurance Scheme.
v. Farmers %ill also $e covered under Personal Accidental Insurance Scheme -PAIS1
in case of 3CC and all other cases %herever it is compulsor(.
1!. P6OOGRAP6S OF (ORRO=ERS
Photoraphs of the $orro%ers for the purpose of identification should $e o$tained.
'ranches ma( $ear the cost of photoraphs of $orro%ers fallin in the cateor( of
>ea!er Sections.
1&. NO '#ES CERIFICAE
'ranches should not insist G=o dues@ certificate from the small and marinal
farmers, share croppers and the li!e for small loan up to #s.)*,***.**. In terms of
4.5. circular =o. #CPP5"/PS/+/5M8*9C;/*78*6 dated Ma( ;;, ;**7 $ranches
ma( o$tain self declaration from the a$ove $orro%ers to this effect instead of
see!in G=o dues certificate@ for loan up to #s.)*,***.**.
1). I'ENI5 AN' SA#S of LAN'LESS LA(O#RERS> S6ARE CROPPER
AN' ORAL LESSEE
In terms of 45 circular =o. #CPP5"/PS/+/5M8*9C;/*78*6 dated Ma( ;;, ;**7
$ranches ma( accept certificates provided $( local administration/ Pancha(at #a,
Institutions specif(in the particulars of land cultivated $( the landless la$ourers,
share croppers and oral lessee for the purpose of sanction of crop loan.
1+. RELIEF $EAS#RES FOR AGRIC#L#RE LOAN IN AREAS AFFECE'
(5 NA#RAL CALA$IIES
As the repa(in capacit( of the people affected $( natural calamities ets severel(
impaired due to the damae to the economic pursuits and loss of economic assets,
the follo%in $enefits ma( $e allo%ed for aricultural loan.
i. 0he principal as %ell as interest on short term loans of the affected farmers due in
the (ear of occurrence of natural calamit( ma( $e converted into term loan or the
repa(ment period ma( $e rescheduled suita$l(.
ii. Short term loans, e.cept those %hich are overdue, at the time of occurrence of
natural calamit(, should $e elii$le for conversion facilit(.
iii. Conversion facilit( %ill $e e.tended in the areas %here natural calamities have
occurred and Anne%ari has $een declared $( overnment. 4o%ever %here such
declaration has not $een made $( the overnment, $ranches ma( e.tend conversion
facilit( to the affected farmers on the $asis of certificate from the "istrict collector
that crop (ield is $elo% )*? of normal (ield supported $( the vie%s of "CC.
iv. Fresh crop loan ma( $e ranted to the affected farmers.
v. 0he installments of principal / interest in respect of term loans of the effected
farmers, e.cept those %hich are overdue, ma( $e rescheduled suita$l(.
vi. Apart from reschedulin e.istin term loan, $ranches ma( sanction need $ased
additional finance to the affected farmers for replacement/ repair of
damaed/destro(ed e2uipment, machineries, sheds, to replenish the lost livestoc!,
to replenish %or!in capital, etc.
vii. 0he repa(ment period of converted/ rescheduled loan account ma( var( dependin
on the severit( of calamit( and its recurrence, the e.tent of loss of economic assets
and distress caused and repa(ment capacit( of the farmer. Generall( the
restructured period of repa(ment ma( $e C to ) (ears. 4o%ever, %here the damae
arisin out of the calamit( is ver( severe, $ranches ma( %ith the approval of
#eional office e.tend the period of repa(ment ranin upto 7 (ears and in
e.treme cases of hardship, the repa(ment period ma( $e proloned %ith the
approval of #eional office up to a ma.imum period of 9* (ears. 0he #eion
office ma( allo% e.tended repa(ment period in consultation %ith 0as! force/
steerin committee of S&'C.
viii. In all cases of restructurin, moratorium period of at least one (ear ma( $e
considered.
i.. As far as possi$le it %ill $e prefera$le to prescri$e the common due dates for
pa(ment of installments of converted loan and e.tended term loans.
.. =o additional collateral securit( for the restructured account should $e insisted
upon.
.i. 0he rate of interest of converted/rescheduled loan should $e same as that chared
on short term loan/ term loan.
.ii. >here relief in the form of conversion / reschedulement of loans is e.tended to the
farmers, such converted/rescheduled dues should $e treated as current dues and
$ranches should not compound interest in respect of the loans so
converted/rescheduled.
.iii. 0he restructured aricultural loan need not $e classified as =PA. 0he asset
classification of the restructured loan %ould $e overned $( the revised terms and
conditions and %ould $e treated as =PA if interest and/ or installment of principal
remain overdue for t%o crop season for short duration crop and one crop season for
lon duration crop.
.iv. Additional finance, if an(, ma( $e treated as Estandard asset Gand its future
classification %ill $e overned $( the terms and conditions of its sanction.
1,. $AC6INER5 O LOO< INO CO$PLAINS
i. 0he #eional offices should entertain and address the complaints from the
$orro%ers if the $ranches do not follo% the uidelines on priorit( sector advance,
and to verif( periodicall( that these uidelines are scrupulousl( implemented $( the
$ranches.
ii. 0he names and addresses of the officer %ith %hom complaints can $e loded
should $e displa(ed on the notice $oard of ever( $ranch
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