• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

Hyderabad , Oct. 23

ANDHRA Bank entered into an MoU with the National Collateral Management Services Ltd (NCMSL), promoted by the National Commodity & Derivatives Exchange of India (NCDEX), on Thursday for loans against farm produce.

The move enables farmers to avoid distress sale of their agricultural produce since they can avail of loans up to 75 per cent of the value of the farm produce subject to a maximum limit of Rs 10 lakh, the Andhra Bank Chairman and Managing Director, Mr K. Ramakrishnan, told newspersons.

The farmers can store their agricultural produce at the warehouses enrolled by the NCMSL and sell from them whenever prices are remunerative.

NCMSL, which facilitates actual buyer linkage, also enables buyers to make direct payment to the bank and take staggered deliveries from the enrolled cold storages and rural godowns, the NCMSL Managing Director and CEO, Mr A. Hari Prasad, said.

According to him, NCMSL enrolls warehouses across the country under franchise agreement, certifies the quality, quantity, and grading of the agricultural produce stored in the warehouses, and issues warehouse receipts to enable the banks to lend against these receipts to farmers.

Having already tied up with eight banks and established presence in 12 States with 80 warehouses, NCMSL has set a target of ensuring disbursals of around Rs 800 crore to farmers in the ensuing season. Of this, it expects Andhra Bank to lend at least Rs 200 crore, Mr Hari Prasad said.

The Andhra Bank Executive Director, Mr R. Balakrishnan, said that since the bank lends against the farm produce based on the certification and valuation done by NCMSL, it provides hedge against risk.

The bank relies on the inventory audit reports made available by NCMSL.

Further, NCMSL offers price alerts and market intelligence reports on a regular basis to the bank enabling the latter take informed decision on lending against farm produce.

Taking advantage of the MoU entered into with NCMSL, the bank proposes to proactively encourage entrepreneurs in setting up rural godowns and also go in for aggressive lending to farmers against their produce, Mr Balakrishnan said.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Andhra Bank in pact with NCMSL for loans against farm produce

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line