ANDHRA PRAGATHI GRAMEENA BANK HEAD OFFICE :: KADAPA Circular No. 68-2006-BC-CRD Date:6.9.2006 PRAGATHI JAI KISAN LOAN SCHEME Branches are aware that the agriculturists require adequate hassle-free term loan to meet their multiple demands under one single credit product. Hence, by taking a holistic view of the farmers credit requirements, covering the entire gamut of expenditure related to investment on agriculture, contingencies, consumption, clearing of high cost private debts and other pressing social obligations and to facilitate accelerated flow of credit to agriculture as against the project oriented rigid system prevailing now, it became necessary for adoption of simplified system of credit delivery to the farmers by Banks. In this context, our Bank has introduced Pragathi Jai Kisan a farmer friendly, hasslefree farm credit scheme for meeting multi purpose/composite credit requirements of agriculturists. Introduction of this flexible credit scheme with relaxed lending norms will help the branches in accelerating flow of credit to agriculture. Regional Offices/Area Offices/Branches shall give wide publicity to this unique scheme and mobilise sizeable quantity of agricultural credit business under Pragathi Jai Kisan. This scheme will come into force with immediate effect. The following are the salient features of Pragathi Jai Kisan Scheme. 1. OBJECTIVES: To make available a composite hassle free credit facility for meeting the investment credit requirements related to the farm development as well as contingencies / consumption requirements. 2. NECESSITY FOR THIS PRODUCT: The bank is extending investment credit assistance for specific purposes such as Land Development, Minor irrigation, Allied activities, farm Mechanisation, etc. These schemes have certain pre-designed requirements such as production/submission of estimates, quotations, plan & layout etc. and releases are linked to the progress made in carrying out the development. Each time a loan is required, the farmer is expected to comply with these requirements irrespective of the quantum of loan (viz. small or big) required. It is observed that for certain types of expenses related to farm development such as adding few pipes to the existing pipeline, repair/replacement of pumpsets, repair of tractor, repair of cattle shed, fencing, construction of approach road, taking up perennial inter crops such as coconut, arecanut, etc. in the existing plantation/orchards on a small scale, purchase/ replacement of existing dairy animal etc. the farmers prefer to invest from their own sources or from private borrowings rather than approach the Bank. In addition, the farmers may like to purchase a small piece of farm/waste land adjacent to their farmlands to have viable and productive holdings... 2
Circular No. 68-2006-BC-CRD date 6.9.2006 2 All these contingencies are directly related to farm development and need to be provided for. Also, we may consider for contingencies not directly related to farm development like purchase of 2 nd hand two wheeler, payment of fees, uniform, books, etc. to their children which are not covered/eligible under education loan scheme, purchase of consumer durables, pure consumption needs, medical expenses, marriage expenses, clearing of high cost private debts, etc. While meeting the private debts under contingencies of the scheme, branches should ensure that only genuine private debts are considered for financing under the scheme, by obtaining the following: i) A request letter in writing from the farmer, with specific details of indebtedness such as name and address of the lender, date and amount of debt, purpose of debt, details of securities pledged/ mortgaged, if any, etc., has to be obtained. ii) The branch has to ascertain the genuineness of the private debt and debts incurred for the purpose of farm related investments and family compulsion expenses alone are considered under the scheme, taking into account the income generating capacity of the farmer and his ability to repay the loan. For meeting out the above needs of the farmers, a hassle free multipurpose/ composite credit product is formulated. 3. ELIGIBILITY: a) All existing farm loan customers from the service/command area of the branch as well as from the operational area of the bank with satisfactory past track record for a period of 2 years owning irrigated lands and cultivating at least two crops annually/cash crops/plantation crops. b) The farmer borrowers should have mortgaged their lands in favour of the bank or willing to offer lands as security by way of mortgage. c) The credit requirements should not be less than Rs.50000/-. d) Major portion of the investment should be directly related to farm development. 4. QUANTUM OF LOAN: The quantum of loan is decided based on the value of security. The maximum eligible amount shall be 50% of the value of the security offered or five times the annual income subject to a maximum of Rs.7.50 lakhs, whichever is lower based on realistic assessment of the value of the property offered as security.. 3
Circular No. 68-2006-BC-CRD date 6.9.2006 3 The Branch Manager shall realistically assess the value of lands as per the procedure in vogue, prepare and place the valuation report in AF-64 supported by valuation certificate from Panchayat Secretary/ MRO, along with the appraisal report in the party s file. If the party has other liabilities not covered by any collateral security, the existing liabilities (the limit or the outstanding whichever is higher in the case of PKCC and outstanding in the case of other loans) have to reduced from the assessed value of the property and the residual value thus arrived has to be taken into account to assess the quantum of loan. For determining annual income, an income certificate from competent revenue authority may be obtained. In case of genuine difficulty in obtaining such a certificate, Branch Manager may make an assessment of annual income based on crops/plantation grown, prepare an Annual Income Certificate and place the same on record. 5. APPRAISAL: The branches shall appraise the proposal carefully keeping in mind the past track record of the party in meeting his repayment commitments, anticipated income and repaying capacity, value of the account, other business benefits available, etc. While determining the eligible loan, a holistic approach shall be adopted in assessing the requirement keeping in view the income stream of the borrower. The branch shall have detailed discussion with the borrower about his developmental needs and the investment required, other contingencies to be met and arrive at the eligible loan amount. However, the purposes for which the borrower is already financed, should not be included as it amounts to excess finance. The amount towards consumption requirement shall not be more than 30%. While assessing the requirement, existing purposes already covered with bank finance may be excluded. The proforma to be used for processing the proposal under Pragathi Jai Kisan is enclosed to this circular. 6. RELEASE SCHEDULE: Directly to the borrower in suitable instalments according to the purposes and needs of the borrower by crediting to his SB account. 7. REPAYMENT SCHEDULE: To be repaid within a maximum period of 7 years, in yearly instalments. Wherever the loan is extended for investment credit needing gestation period, repayment holiday of 1 year may be extended. However, the total period of the loan should not exceed 7 years including the gestation period. The repayment schedule may be suitably drawn having regard to the expected income of harvesting/marketing of farm produce...4
Circular No. 68-2006-BC-CRD date 6.9.2006 4 8. RATE OF INTEREST: a) Rs.50000/- & up to Rs.1.00 lakh : 11.50% p.a. b) above Rs.1.00 lakh : 12.00% p.a. Penal interest of 2.25% shall be charged on overdue amount. 9. PROCESSING FEE: 1% of the loan amount + Service Tax. 10. INSPECTION CHARGES: The following are the inspection charges to be charged. From Rs.50000/- & upto Rs.1 lakh Above Rs.1 lakh & upto Rs.2 lakhs Above Rs.2 lakhs & up to Rs.7.50 lakhs Rs.40/- per visit subject to a maximum of Rs.200/- per borrowal a/c per year + Service Tax Rs.50/- per visit subject to a maximum of Rs.250/- per borrowal a/c per year + Service Tax Rs.100/- per visit subject to a maximum of Rs.400/- per borrowal a/c per year + Service Tax 11. SECURITY: Mortgage of agricultural lands. 12. SANCTIONING POWERS: The following are the sanctioning powers delegated to various functionaries under this scheme. Sl. Purpose Sanctioning Powers (in lakhs) No. Manager (Scale I) Manager (Scale II) Manager (Scale III) Regional Manager 1 Term Loans 1.00 2.00 3.50 7.50 13. CLASSIFICATION: The loan shall be classified as Direct Agricultural Advances Medium Term. 14. REPORTING: All these loans arranged shall be shown under Priority Sector-FLMT Category. 15. CREDIT LIMITS: Credit limits shall be obtained from the respective Regional Office. Without limits, branches shall not sanction the loans...5
Circular No. 68-2006-BC-CRD date 6.9.2006 5 16. DOCUMENTS/PAPERS REQUIRED: a) Xerox copies of pattadar pass books and title deed pass books and adangal b) Land revenue receipt c) Sale deeds and link documents d) EC for 25 years e) Legal opinion and search report f) ADN-11 (Loan Agreement for Agricultural Loans), ADN-11 A (Guarantor Agreement) g) ADN-23 (Handing over title deeds for legal scrutiny) h) AF-1 (Loan application) i) AF-11 (Pre-sanction report) j) ADN-4 (stamped receipt) k) AF-62(Assets & Liabilities statement) l) AF-64 (Manager s confirmation of valuation of immovable property) 17. OTHER TERMS & CONDITIONS: a) The farmers should be encouraged to set apart a portion of their surplus in the savings product of our bank. b) During the pendency of an existing loan under the scheme, no fresh loan under the scheme shall be sanctioned. c) All other existing liabilities of the borrower shall be regular. d) If the borrower is agreeable, he may be covered under Personal Accident Insurance Scheme by collecting the premium from him. Clarifications required, if any, on this scheme, may be sought from HO-Credit Department. (M.OBULESU) CHAIRMAN Encl: Process Note
Encl. to Circular No. 68-2006-BC-CRD date 6.9.2006 ANDHRA PRAGATHI GRAMEENA BANK:: HEAD OFFICE :: KADAPA PROCESS NOTE OF PRAGATHI JAI KISAN LOAN SCHEME BRANCH: REGION: Note submitted to : Manager/Regional Manager 1. Name of the Applicant : 2. Net worth of the applicant : 3. Whether the applicant is an existing customer : with good track record for the past two years 4. Whether the direct and indirect liabilities of : the applicant are regular (give details) 5. Name of the Surety : 6. Net worth of the surety : 7. Whether the direct and indirect liabilities of : the surety are regular (give details) 8. Details of the land holdings : Sl. Type of holding No. 1 With assured irrigation 2 Other holdings Area (in acres) Crops grown 9. Annual income of the applicant : Rs. 10. Whether income certificate from : the competent Revenue Authority is obtained ii
Encl. to Circular No. 68-2006-BC-CRD date 6.9.2006 ii 11. If No, Branch Manager should arrive at annual income as per the following table: (A) Agricultural Income: Season Crop Acres Yield per acre (Qtls.) Total yield (Qtls.) (A3 x A4) Price per Qtl. Gross income (A5 x A6) Cost of cultivation per acre (Amt. in Rs.) Total cost Net of cultivatioion product- (A3 x A8) value (A7-A9) A1 A2 A3 A4 A5 A6 A7 A8 A9 A10 Total (B) Other Income : i) From Agriculture allied activities : ii) From other sources (specify) : 12. Details of property offered as security and its value: Village Survey No./s Extent (in acres) Assessment (in Rs.) Value (in Rs.) Total 12 (a) Residual value of the property after deducting the existing : liabilities without collateral security, if any 13. Whether legal opinion from panel : advocate is obtained and title ascertained 14. Purpose of the loan : A) OFF Farm Purposes (Amt. in Rs.) Purpose Details Amount required B) ON Farm purposes.iii
Encl. to Circular No. 68-2006-BC-CRD date 6.9.2006 iii 15. ASSESSMENT: a) Amount equal to 50% of the residual : Rs. value of the property (12 a) b) Amount equal to 5 times annual income : Rs. c) Amount required by the applicant : Rs. d) Loan amount recommended : Rs. (Maximum ceiling : Least of a, b, c) SANCTION APPRAISING OFFICER In due consideration of techno-economic viability of the proposal, credit worthiness of the borrower, Sri.. and the guarantor Sri and as per norms of Pragathi Jai Kisan Scheme, which were explained to the customer, the following credit facility is sanctioned: I. AMOUNT SANCTIONED: A) On farm investment including contingencies B) Off farm i.e. for consumption and to meet other social obligations, if any Total amount sanctioned II. RATE OF INTEREST : III. RELEASE SCHEDULE : Purpose (Amt. in Rs.) Amount sanctioned IV. REPAYMENT SCHEDULE : V. SECURITY : Creation of charges/rsm/rem/urem of properties mentioned in Point No.12 above with an extent of. acres and valued at Rs... DATE: MANAGER/REGIONAL MANAGER