The public sector lender, Karnataka Bank has entered into an agreement with National Collateral Management Services Ltd (NCMSL) as part of which the latter will provide warehousing services to the bank's customers who need it. Both the entities have signed a MoU to formalize the agreement.
According to the agreement, Karnataka Bank will provide loans to farmers against godown/cold storage receipts given by NCSML under the ‘KBL-Krishik Bhandar' scheme of the bank.
The bank issued a statement which said that farmers can get the benefit of the scheme by storing their produce in the godowns/cold storages of NCMSL. In addition to providing loans, NCMSL will also provide insurance against damage to crops from risks like fire, floods, war, malicious damage, burglary, riots and earthquakes.
It is reported that National Collateral Management Services Ltd is one of the country's largest storage solutions provider to farmers. It has a network of numerous warehouses spread throughout the country, which is used by farmers for storing grains, oil seeds, pulses, spices, commercial and plantation crops.
Karnataka Bank has planned to achieve a target of disbursing Rs. 3, 770 crore worth of loans in the agricultural sector by the end of the current fiscal year.