LT policy under Investment Credit-TSCAB | TSCAB
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Loans, Savings

LT policy under Investment Credit-TSCAB

L.T. Loan Policy of TSCAB under Investment Credit

For the year 2017-18

Preamble:

The LT Loaning Programme allocated to DCCBs during the year 2016-17 expired by 31.03.2017. The proposed Refinance policy under investment credit for the year 2017-18 is as follows.

 

Eligibility Criteria:

Taking into the account, the norms laid down by NABARD as per the policy guidelines communicated vide their Lr.No. NB.DoR/4911/PPS-9/2016-17, dt.31.03.2017, the eligibility criteria of the DCCBs for advancement of LT Loans is devised as follows for the year 2016-17.

 
License:

DCCBs without license or whose licenses are cancelled are not eligible for refinance.

 

Compliance CRAR norms by DCCBs:

No refinance would be available to DCCBs having CRAR below 7% as on 31.03.2016. The net NPA shall not be more than 6.00% as on 31.03.2016. Maximum net NPA permissible for DCCBs is up to and inclusive of 20.00% as on 31.03.2016

Compliance of Section 11(i) of BR Act 1949 by DCCBs:

No refinance would be available to Section 11(i) non-compliant DCCBs.

 

Audit:

Audit of DCCB for the year 2015-16 should have been completed and relative audit reports along with financial statements should have been received by TSCAB. The DCCBs with audit classification ‘C’ and ‘D’ for the year 2015-16 will not be eligible for refinance.

Further the Audit of DCCB for the year 2016-17 has to be completed by 30.09.2017. The drawal applications after 1st October, 2017 will be allowed for the DCCBs which have furnished the Audit Report for the year 2016-17.

Sanction of allocation to DCCBs with Audit rating ‘C’ or ‘D’ can be considered, if such DCCBs improve their Audit rating to ‘A’ or ‘B’ during the year 2016-17.

In case there is any improvement in any of the financial parameters for the year 2016-17 as per audited figures, the same will be reckoned for eligibility of refinance.

Eligibility Criteria

Quantum of refinance

Net NPA as on 31.03.2016

If, net NPA percentage to Loan outstandings is less < 6.00%

The quantum of refinance will be 100% of the total eligible allocation arrived at basing on last year’s disbursements at DCCB Level or Average of previous 3 years disbursements or last year’s allocation whichever is high.

If, net NPA percentage to Loan outstandings is > 6.00 % and <10.00%

The quantum of refinance will be 75% of the total eligible allocation arrived at basing on last year’s disbursements at DCCB Level or Average of previous 3 years disbursements or last year’s allocation whichever is high.

If, net NPA percentage to Loan outstandings is > 10.00 % and <20.00%

The quantum of refinance will be 50% of the total eligible allocation arrived at basing on last year’s disbursements at DCCB Level or Average of previous 3 years disbursements or last year’s allocation whichever is high.

If, net NPA percentage to Loan outstandings is > 20.00%

The Bank will not be eligible for refinance.

 

  • Final Allocation:

  • The final allocation under LT Loaning Programme for the year 2017-18 is prepared basing on the DCCBs Audit Classification and net NPA position as on 31.03.2016, eligible allocation will be arrived at basing on last year’s disbursements at DCCB Level or Average of previous 3 years disbursements or last year’s allocation whichever is high.

  • The disbursements for SGP&BBC purpose should not exceed 25% of the total allocation and for any other single /specific purpose it should not exceed 75% of the total allocation.

  • The drawals will not be allowed to the DCCBs, if they default in payment of any installment to TSCAB.

     

    Extent of Refinance:

  • The extent of refinance during 2017-18 will be as under:

  • The quantum of refinance shall be 100% for Land Development, minor & micro irrigation, water saving and water conservation devices, fisheries, animal husbandry, SHGs/JLGs/RMGs, Agri-Clinics and Agri-Business Centres, Agro-Processing, Wasteland Development, dry land farming, contract farming, plantation and horticulture, agro-forestry, seed production, tissue culture, plant production, agri-marketing infrastructure (including cold storage godowns and market yards etc.) agriculture implements, non-conventional energy sources, financing in areas of watershed & tribal development programmes already implemented and 97.5% for all other diversified purposes.

     
    Terms and Conditions for Sanction of L.T. Loans:

In addition to the terms and conditions communicated from time to time for different purposes under LT Loaning the following are the additional terms and conditions:

The DCCBs should ensure that the Branches and PACS should have a minimum recovery percentage of 50% as on 30.06.2016 under LT, to become eligible for securing allotment of LT Loaning Programme. A Certificate to this effect should be furnished along with the reimbursement claim.

The eligibility of Branches and PACS will be arrived at based on the recovery percentage as per the Branch and PACS–wise Member level DCB as on 30.06.2016 up to 31.07.2017 and based on the Branch and PACS–wise Member level DCB as on 30.06.2017 from 01.08.2017 onwards.

  1. In case of Farm Mechanization and Two Wheeler Loans, the borrower should meet 25% of the cost by way of margin money/down payment including share capital contribution.
  1. In case of Minor Irrigation Loans, if the borrower does not meet 25% of the cost by way of margin money/down payment including share capital contribution, loans may be sanctioned subject to the fulfillment of the following conditions:
  1. Borrower must be Kisan Credit Card A/C holder and must be operating the account regularly.
  1. The electric pumpset financed by the DCCB should have been registered with Electricity Dept., i.e., the DCCB should ensure that the service connection number is available at the time of release of loan towards the purchase of pumpset/electric motor/submersible pumpset as the case may be.
  1. The PACS/DCCB should ensure that the asset financed is insured, till the loan amount is repaid in full.

There is no ceiling limit for sanction of Long Term Loans by DCCBs for any individual application. However, the refinance from TSCAB is limited to a maximum of Rs.10.00 lakhs for the loans sanctioned by DCCBs in respect of each individual application including Tractors and the balance amount has to be borne by DCCBs from out of their own funds. In respect of polyhouse refinance limit from TSCAB to DCCBs is available up to Rs.35.00 Lakhs for the loans sanctioned by DCCBs for each individual application.

However, in respect of Combined Harvesters, refinance is available up to the extent of 75% of the cost of the Harvester, subject to other terms and conditions.

  1. The DCCBs should ensure that allocation under BBC(Bullock and Bullock Carts), SGP(Sheep, Goat, Piggery) do not exceed 25% of the total allocation under LT Loaning for the year 2017-18.
  1. The allocation sanctioned for the year 2017-18 is valid upto 31.03.2018 and no refinance will be allowed on the limit after 31.03.2018.
  1. The DCCB should ensure that the disbursements are to be made within the sanctioned allocation and submit RI claims before 15.03.2018.
  1. In respect of 2nd installment, the refinance will be allowed even if the Branch and PACS is not eligible in terms of Recovery percentage of 50%, provided the Branch and PACS is having 50% recovery percentage at the time of release of 1st installment. For this, the DCCB has to furnish the particulars of amount sanctioned, date of release of 1st installment and date of release of 2nd installment etc., along with the drawal application.
  1. In the financial particulars and liquid assets position furnished by DCCBs along with drawal application, latest position on borrowings and disbursements should be indicated and parity between borrowings and lendings should be maintained.

 
Unit cost and Repayment period:

The NABARD through their mail dated 27.10.2015 has communicated the Unit Costs and repayment periods for different purposes under Investment Credit for 2015-16. The same was circulated to all DCCBs and the DCCBs may adopt the same for sanction of Long Term loans. However, as communicated earlier vide Residual APCOB Circular No. LT-Opr/LT(Agr) Loans/Int. Rates/2012-13 dt.09.01.2013, the maximum repayment period is restricted to 9 years.
 
Reimbursement of Disbursements made by DCCBanks – Preferring claims from NABARD:

After making disbursement to the borrowers through PACS/ Branch, the DCCB may prefer reimbursement claims to TSCAB in the prescribed proforma under 1st installment as well as 2nd and subsequent installments separately.

The following aspects will be verified while processing RI. Claims of DCCBanks:

  1. Verification of Rate of Interest in case of first installment.

  2. Repayment period.

  3. Total Sanctioned amount per unit as per guidelines in vogue.

In addition to the above, it is to be ensured that the following certificates as required are submitted by the DCCBank along with the drawal application/reimbursement claims:

  • Proforma Certificate
  • Certificate on maintenance of Books of Accounts at PACS level.
  • Milk Route Certificate for Dairy
  • Certificate to the effect that the Cheques not encashed at ground level are not included in the present claim (Effective Mortgage Certificate).
  • Certificate to the effect that the PACS/Branches through which loans were financed to borrowers are eligible for LT Loaning as they have fulfilled the minimum recovery norm of 50% under LT as on 30.06.16/30.06.17.
  • Certificate of period of disbursement made by the DCCB.
  • Statement with full particulars of borrowers i.e., Loans sanctioned, Margin Money/Down Payment, Share Capital collected under Farm Mechanisation.
  • Certificate under Minor Irrigation as indicated at para 5(2).
  • Financial particulars and Position of Liquid Assets.
  • Certificate to the effect that the Mortgage Bonds executed by the Borrowers against the present claim are under the custody of DCCB.
  • Certificate to the effect that the DCCB have not applied earlier for refinance against the loans covered by this drawal application.
     

    Rate of Interest:

The rates of interest to be charged at various levels with effect from 01.11.2016, as communicated to DCCBs are as follows:

Sl

No

Institution

Rates of Interest / Margins

Interest Rate

(18months to below 5 years)

Interest Rate

(5years and upto 9 years)

Margin

1

TSCAB to DCCBs

9.00

8.90

0.50%

2

DCCBs to PACS

10.50

10.40

1.50%

3

PACS to Ultimate Borrowers

12.00

11.90

1.50%

The Interest rates are subject to change based on revision by NABARD from time to time.

Penal Interest: In the event of default, penal interest rate at 2.00% over and above the interest rate at which refinance was disbursed, will be charged on the amount of default and for the period of default.

 

Share capital:

The DCCBs have to collect share capital at 5% of the loan amount or as per DCCB norms.

 

Security (Mortgage Bonds):

Section 94 of APCS Act deals with the mortgages created in favour of Financing Bank/PACS, which stands vested in TSCAB. The landed property offered for mortgage by the members towards security will create mortgage in favour of PACS/Branch and Mortgage Bonds executed by farmers should be kept in the safe custody of DCCB HO. The DCCB has to furnish a Quarterly Statement regarding the Status of Mortgage Bonds received for safe custody.

 

Time frame for sanction and disbursement of loans by PACS/DCCBs

Particulars

Loans upto Rs.2 lakhs

Loans above Rs.2 lakhs

Admission of Loan Application along with Pattadar passbook and title deeds – Preliminary Scrutiny

Day 1

Day 1

Obtaining of E.C.

Day 2

Day 2

Field inspection, appraisal, scrutiny

Day 3

Day 3 & 4

Legal Scrutiny and sanction by PACS

Day 4

Day 5 & 6

Loan Case No. and Sanction by Branch/HO of DCCB

Day 5

Day 7

Execution of Mortgage Bond and forwarding of Loan application along with Mortgage Bond to the Branch/HO from PACS

Day 6 & 7

Day 8 & 9

Sanction and disbursement by HO/Branch/PACS

Day 8

Day 10


Land valuation & Eligibility criteria:

Keeping in view the existing land valuation norms, the following modifications were made in order to help the farmer/borrower:

A. 100% of SRA Value (or)

B. 200% of SRA value subject to the maximum limits indicated by SCB vide circular dated 10.6.2013 viz., Double Crop wet land – Rs.2.50 lakh, Single crop wet land – Rs.1.50 lakh and Dry land – Rs.1.00 lakh.

(Note: When only 100% of SRA value is taken, then there will not be any maximum ceiling limit per acre as indicated in SCB circular dt.10-6-2013. This is in order to give benefit to the borrowers where the SRA values of the lands are fair enough)

A or B whichever is higher.

Furnishing of SRA Value certificate is a must.

However the DCCBs should have placed the above subject before their Board of Management for consideration and approval, before implementing the same.

 

Field Inspection:

Sl. No.

Range of Loan

Competent Authority to conduct Field Inspection

1.

Upto Rs.1,50,000

Supervisor of DCCB along with CEO/Secretary of PACS

2.

Above Rs.1,50,000 up to Rs.3.00 lakhs

Br. Manager along with Supervisor of DCCB & CEO/ Secretary of PACS.

3.

Above Rs.3.00 lakhs upto 6.00 lakhs

AGM along with Supervisor of DCCB & CEO/Secretary of PACS

4.

Above Rs.6.00 lakhs

DGM along with Supervisor of DCCB & CEO/Secretary of PACS

 

Sanction and disbursement of L.T. Loans:

The Branch Manager is authorized to sanction and disburse LT loans up to Rs.2.00 lakhs. The LT loans of above Rs. 2.00 lakhs shall be sanctioned by the CEO of the DCCB. The loans sanctioned by the Branch Manager and CEO of DCCB are required to be got ratified by the Board of Management of DCCB.

 

Others:

  1. The DCCBs are advised to ensure coverage of LT Loans to farmers under the categories of SCs, STs and Small and Weaker Sections as prescribed.
  1. The DCCBs should claim refinance from TSCAB within 3 months from the date of disbursement.
  1. The DCCBs are also advised to complete the disbursements under all purposes by the end of February, 2018, and refinance claims are to be submitted to TSCAB latest by 15.03.2018, to enable TSCAB to claim refinance from NABARD in time.
  1. The DCCBs are further advised to adhere to the various terms and conditions, guidelines as communicated from time to time relating to Valuation of Lands, Field Inspection and Delegation of Powers for sanction of Loans and the technical parameters etc.
  1. The DCCBs should furnish the periodical returns to TSCAB promptly without any delay.
  1. The DCCBs are advised to liquidate the defaults immediately besides regularly passing on the collections effected at member level to TSCAB without any delay.
  1. The DCCBs are advised to continue the preparation of DV files and keep them in safe custody, as per the guidelines already issued in the matter. The DCCB should prepare Branch-wise list of DV files so as to enable the TSCAB officers to verify the DV Files in selected Branches.
  1. The DCCBs are advised to furnish monthly statements with regard to Test Verification, Utilization study, Test Field Inspection and Test Legal Scrutiny, as instructed earlier by CMI & AD of APCOB, vide Circular dated 17.2.2010.
  1. The DCCBs are advised to furnish loan documents under LT (Agrl.) Finance such as, Loan agreement, D.P.Note etc. to TSCAB for the year 2017-18 along with MC Resolution. The DCCBs are also advised to obtain agreement from PACS in the proforma communicated.

                                                                                                                                                                    Sd/-

MANAGING DIRECTOR