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Sanction of Bank Loan and its Disbursement After ensuring technical feasibility and financial viability, the scheme is sanctioned by the Bank. The loan is disbursed in stages against creation of specific assets, purchase of equipments and animals. The end use of the loan is verified and constant follow-up is done by the bank. |
Lending Terms - General
Unit cost: Each Regional Office of NABARD has constituted a State Level Unit Cost Committee under the chairmanship of RO-in-charge and with the members from developmental agencies, commercial banks and co-operative banks to review the unit cost of various investments once in six months. The same is circulated among the banks for their guidance.
Margin Money: NABARD has defined farmers into three different categories and where subsidy is not available the minimum down payment as shown below is collected from the beneficiaries.
a) Small farmer 05%
b) Medium farmers 10%
c) Large farmers 15%
Interest Rate for ultimate borrowers : Banks are free to decide the rate of interest within the overall RBI guidelines. However, for working out the financing viability and bank ability of the model project we have assumed the rate of interest as 12% p.a.
Security: Security will be as per NABARD/RBI guidelines issued from time to time.
Repayment Period of Loan: Repayment period depends upon the gross surplus in the scheme. The loans will be repaid in suitable half yearly/annual installments usually within a period of about 5-6 years with a grace period of one year.
Insurance: The animals may be insured annually or on long term master policy, where ever it is applicable. The present rate of insurance premium for non IRDP schemes is 4% per annum.
