Karnataka Bank has signed a memorandum of understanding with the National Collateral Management Services Ltd (NCMSL) for warehousing services.
Under this agreement, the bank will offer financing against the godown receipts/cold storage receipts issued by NCMSL under its ‘KBL-Krishik Bhandar’ scheme.
A press release said here on Thursday that generally during harvesting season, the price of the agriculture produce will be at a lower level. Hence, farmers can store their agriculture produce in the godowns/cold storages of NCMSL.
In the off-season, farmers can sell the produce in the market at a higher price. Hence, they will benefit by availing finance under this scheme.
NCMSL will also ensure insurance coverage for risks such as fire, burglary, earthquake, riots, malicious damage, war and flood, it said.
The release said NCMSL is one of the largest institutions engaged in providing quality storage solutions to farmers in the agro-commodity value chain.
The storage network, which is spread across the country, stores grains, pulses, oil seeds, commercial crops, spices and plantation crops .
Karnataka Bank has set a lending target of Rs 3,770 crore to the agriculture sector by March 2013, it said.
Mahabaleshwar M.S, General Manager of Karnataka Bank, and Shyamal Gupta, Chief Business Officer of NCMSL, signed the agreement, the release added.