Agric Finance

Agricultural Finance refers to facilities granted for the following purposes:

  • Agricultural Production Loans for inputs like seeds, fertilizers, pesticides,etc. Production Loans also include working capital finance to meet expenses of various nature attributable to farming.
  • Farm Development Finance for improvement of agricultural land, orchards, nurseries, agro-allied industries, bakeries, animal husbandry, horticulture, etc.) and construction of storage facilities, etc. for storage of seeds, raw agriculture/farm produce.
  • Agricultural Finance Lease for the purchase of agricultural machinery and equipment like tractors, threshers, etc.
  • Non-fund based facility (e.g., Letters of Credit) for procurement or importation of agricultural supplies etc. by corporate and non- corporate farmers.

Non-farm credit includes financing for livestock such as dairy, poultry and fisheries, etc.

Agriculture Financing shall not include loans to traders and intermediaries engaged in trading/processing of agriculture commodities. Such lending would be covered under Prudential Guidelines for Corporate/ Commercial Banking or SME Financing.

However, agricultural financing can be extended to entities (including corporate farms, partnerships and individuals) engaged in farming activity, as well as processing, packaging and marketing of mainly their own agricultural produce, provided 75% of the agriculture produce being processed, packaged and marketed is produced by the above-mentioned entities themselves.