New Delhi: The agricultural activities in northern India are set for a big boost as the Centurion Bank of Punjab (CBoP) has planned to lend around Rs. 1,200 crores as agricultural credit. Of this amount Rs. 600 crores have already been distributed by the bank and the remaining amount will be disbursed by March 2008.
Northern India especially, Punjab, Haryana and Himachal Pradesh have been witnessing a tremendous rise in commercialization of agriculture and thus are creating a huge demand for agri credit. Last year CBoP financed around Rs. 419 crores for this segment.
The CBoP is taking special initiative to promote modern agricultural practices in the region to improve productivity and increase the income of farmers. Shailendra Bhandari MD and CEO of the bank said," The bank is having a team of 250 agriculture graduates to apprise the farmers about the innovative techniques of farming, which could get them better returns. The stagnation in the agricultural incomes in the past few years could be overcome if the agricultural funding was coupled with technological upgrade. And for this the bank would hire another 100 agri graduates by March 2008 to meet the target of higher agri lending."
To improve the situation of small and marginal farmers and to bring them into the mainstream agricultural growth, the bank is also planning to promote co-operative farming in near future. 20,000 farmers received funding from the bank during last year and the bank is planning to extend the help to another 20,000-25,000 more next year.
Direct lending to the banks will help eliminate middle men who thrive on the inadequacies in the system and exploit the farmers. RBI had asked banks to provide No-frill accounts to poor and weaker sections of the society and make banking more accessible and simple for them. Responding to the call, CBoP is also planning to introduce No-frills account to bring in more people into the banking sector. CBoP provides loans for Direct and Indirect Agriculture activities at competitive rates.
Under the Direct Agriculture loan scheme the bank provides a Revolving Crop Loan, which offers need based credit, to meet expenses towards cultivation of crops, like purchase of inputs such as seeds, fertilizers, pesticides, payment of labour or electricity charges, etc., to farmers having irrigation facility and also preferably undertaking allied activities. The CBoP also provides a Kisan Credit Card, which helps the farmers to purchase the inputs like seeds, fertilizers, pesticides etc. and also helps them take care of their post harvest and other household expenses. The salient features of this credit card are:
- The product is in the form of cash credit or overdraft facility
- Limit shall be for a period of three years
- One time documentation and hassle free system of renewal
- No margin money required
Centurion Bank of Punjab also provides a "Kisan Gold Card", with attractive terms. A dairy loan is also offered by the bank in specific areas. Catering to the special needs for dairy farmers it offers help as a term loan or overdraft.
Under its Indirect Agriculture loans, the bank has various schemes designed for financing commission agents. Available in the areas dominated by grain markets, these schemes offer the commission agents a minimum advance of Rs. 1 lakh and maximum of Rs. 40.00 lakhs against their book debts. The advance is extended to refinance the credit given by commission agents to farmers for purchase of inputs, seeds, fertilizers and pesticides and also for meeting their personal needs.