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IDBI Bank, SBP ink pact

Our Bureau

Mumbai, July 19 National Bulk Handling Corporation (NBHC) will work as a collateral manager with IDBI Bank and State Bank of Patiala (SBP) for warehouse receipt loans.

The banks have entered into an agreement to provide credit to farmers, corporates and processors against NBHC warehouse receipts.

The stock pledged with the banks will be kept in warehouses owned by NBHC which will guarantee quality and quantity of the commodity.

Warehouse receipts are not negotiable as Warehouse (Regulations and Development) Bill, 2005, is pending in Parliament.

Negotiability means goods pass to the holder of the receipt in the event of any default or defect in title.

In case there is a default, NBHC will help the banks to close the loan, said Mr. Anil Choudhary, MD and CEO of NBHC.

Mr Choudhary, Mr D.K Kamble, Chief General Manager - priority sector department of IDBI, and Mr G P Kantia, DGM of priority sector advances of SBP signed the agreement .

“There is a vast potential of lending in the agriculture through warehouse receipt financing.

Tying up with NBHC will help IDBI Bank increase the agri-portfolio.

NBHC, through its expertise in commodity handling, in turn, will help IDBI Bank mitigate the risks associated with commodity financing,” said Mr Kamble.

Corporates now account for a major share of the agricultural lending portfolio of NBHC.

This is mainly due to access to the bank in the urban area, said Mr Choudhary adding that NBHC is looking to tie up with more public sector banks, which will enhance the lending in the semi-urban areas.

It has tie-ups with with 12 banks including those in private sector like HDFC, UTI, Kotak Mahindra and DCB for warehouse receipt loans.

More Stories on : Farm credit | Commodity Exchanges

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