Purpose

Financing individuals for purchase of good quality high yielding milch animals, viz., cows/buffaloes or cross bred cows for milk production. . Financing individuals for purchase and rearing of calves upto the stage of first lactation.

ELIGIBILITY:

 (i)     Individual borrowers undertaking dairying as subsidiary activity: 

(a)      The intending borrower(s) should be having experience in maintenance of milch animals.

(b)    He should be landless agricultural labourer or farmer/any individual who has arrangements for supply of adequate quantity of fodder.

          (c)     Activity should be economically viable.

          (d)     He should have shed/accommodation for keeping the animals or should have adequate space for constructing the shed for keeping the animals.

 (ii)    Individual borrowers undertaking commercial dairy as main activity:

(a)      Borrower(s) should be well experienced in running a dairy farm on commercial basis intending to undertake dairying as his main vocation/business. 

(b)     He must have accommodation for maintenance of animals or suitable space for construction of shed should be available with the applicant on which shed could be constructed.

 (c      Project report should be submitted by the applicant which should indicate the techno-economic viability, marketing arrangements, infrastructure, etc. 

EXTENT OF LOAN

(i) Need-based loan should be provided.  A unit of 2 milch animals is considered viable minimum size for such an activity for continuous production of milk.  Cost of the milch animals should be in conformity with the unit cost circulated  by Head Office. 

(ii)      Financing of three milch animal units under Swaranjayanti Gram Swarozgar Yojana (SGSY) may be considered  

(iii)     Financing for purchase of single animal dairy unit may be done subject to the usual norms of technical feasibility and financial viability and also the following conditions: - 

(a)      Dairy unit is undertaken as a supplementary activity by the borrower(s). 

(b)     While fixing repayment schedule, incremental income from investment and repaying capacity of the borrower(s) is taken into account. 

MARGIN NORMS:

Amount of loan                                               Margin

  Upto Rs.50,000/-                                                 nil

 Above Rs.50,000/- to Rs.2 lakh                            5%

 Above Rs.2 lakh to Rs.5 lakh                                10%

        Above Rs.5 lakh                                                           25%

SECURITY NORMS

:           Production Credit/Investment Credit:

 (i)     Upto Rs.50,000/-

          Hypothecation of animals/crops/assets created out of bank loan; 

(ii)     Above Rs.50,000/- 

(a)        Hypothecation of animals/crops/assets created out of bank loan; AND

(b)     Charge on land as per Agricultural Credit Operations and Miscellaneous (Provisions) Act of the State concerned/Mortgage of agricultural land valued at 150% of amount of loan for other farmers and 100% of the loan amount for small farmers/marginal farmers; OR

Alternate security, viz., charge/lien over liquid securities such as term deposits/NSCs/KVPs, etc., which may be considered adequate. OR

          Suitable third party guarantee. 

REPAYMENT OF LOAN:

 Loans for purchase of milch animals should be repaid within 5-6 years (spread over 2-3 lactations).

Due date of repayment should be fixed on annual basis.  However, in these cases also, if the borrower(s) desired to repay annual instalment at shorter intervals of a month, quarter or a half-year, in equal or unequal parts, in accordance with a prior agreement with the bank, they should be allowed to do so.