TO ALL OFFICES:
REG:
SCHEME FOR FINANCING FARMERS FOR PURCHASE OF TRUCKS AND OTHER TRANSPORT
VEHICLES.
Detailed guidelines for financing
farmers for purchase of trucks and other transport vehicles were circulated to
all offices from time to time. Guidelines on the captioned scheme have been
consolidated by subsuming the operative part of subsequently issued circulars as
per Annexure.
Incumbent Incharge of the branches are advised to
adhere to guidelines contained in scheme for financing farmers for purchase of
trucks and other transport vehicles and boost agriculture advances.
REG: SCHEME FOR FINANCING FARMERS FOR PURCHASE OF TRUCKS AND OTHER TRANSPORT VEHICLES.
With a
view to augmenting flow of agriculture inputs and outputs, transport sector
plays a vital role in facilitating timely availability of farm inputs and
marketing of farm produce. In order to help farmers in purchasing truck or other
transport vehicles like jeeps, pick-up vans, mini trucks, etc., for assisting in
transport of agricultural inputs and farm produce, scheme for financing farmers
for transport vehicles has been formulated.
Details of
scheme for financing farmers for purchase of trucks and other transport vehicles
are given as under: -
1.
PURPOSE:
Loan may be given for purchase of following vehic1es:
(i)
New
trucks made by standard manufacturing concerns like Ashok Leyland, Tata,
Mercedes Benz, etc.
(ii)
Other new
motorised light/medium vehicles like tempo, matador, jeeps, pick-up vans,
mini-trucks and other light commercial vehicles made by standard manufacturing
concerns.
2.
ELIGIBILITY:
(i)
An
individual or a Hindu Undivided Family, or an Association of persons not being a
company or a Co-operative Society being the owner, tenant or lessee of land and
engaged in farming or allied agricultural activity.
(ii)
Borrower
should hold necessary permit/driving licence required under law. Where borrower
is not having a driving licence in his own name, an undertaking to the effect
that vehicle shall be driven by a person holding valid driving licence should be
obtained as in the case of financing for tractors.
(iii)
Loan
for purchase of trucks shall be given to farmers whose land holding is 5 acres
or more. Loans for purchase of light/medium vehicles like jeeps, pick-up vans,
mini-trucks, etc., to be used for transport of agricultural inputs and farm
products shall also be made to farmers whose land holding is comparatively
smaller, i.e. 3 acres or more. If more than one farmer raise loan jointly, their
land holding may be considered as one unit for the purpose of eligibility.
(iv)
Satisfactory
proof to the effect that borrower is a farmer and that the purpose for purchase
of vehicle is to transport agricultural inputs and farm products must be
obtained and kept on record. Proof may be in the form of extract from revenue
records that borrower is a farmer and
declaration from him/her that he/she would use vehicle for transporting
agricultural inputs and farm products.
3.
NATURE OF LOAN:
Term Loan.
4.
MARGIN NORMS:
Amount of loan
Margin
(i)
Upto Rs.50,000/-
Nil
(ii)
Above Rs.50,000/- to Rs.2 lakh
5%
(iii)
Above Rs.2 lakh to Rs.5 lakh
10%
(iv)
Above Rs.5 lakh
25%
NOTE:
(i) Where
subsidy is available, the same should be treated as margin and no further margin
money should be stipulated unless subsidy falls short of requisite margin.
(ii) In
respect of Govt. sponsored schemes, the margin/security norms shall be as per
the respective schemes for agricultural advances or the above mentioned margin
which ever is lower.
5.
SECURITY NORMS:
Investment Credit:
(i)
Upto Rs.50,000/-
Hypothecation of vehicle/moveable assets created out of Bank
loan;
(ii)
Above Rs.50,000/-
(a) Hypothecation of
vehicle/moveable 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.
NOTE:
(i)
Vehicle purchased
with the Bank loan will remain hypothecated to the Bank as security and shall be
registered with Motor Vehicles Authority in joint names of the borrower and the
Bank as the ‘Hypothecator’ and
the ‘Hypothecatee’, respectively. Photocopy
of Registration Book of the vehicle financed must be kept on Bank’s record.
Further, it may be got registered as Public Carrier with an objective of
deriving income from custom service to other farmers.
With a view to providing constructive evidence of the Bank’s charge
over vehicle hypothecated to the Bank, lending branches should get words,
“Financed by P.G.B. BO:_______” printed on back of the vehicle at a
conspicuous place.
ii) In
States where legislation on the lines suggested by the Talwar Committee has been
passed, a simple declaration creating a charge on the land offered as security
will be sufficient. In such cases,
mortgage of land may not be necessary.
(iii) While
valuing land for the purpose of security, post development value of land shall
be taken into consideration.
(iv) Branches
may not ask for mortgage of land in cases where the amount of loan net of
subsidy is upto Rs.50,000/- or subsidy is not received in advance or
simultaneously at the time of disbursement of loan.
(v) Branches
are advised to ensure that value of security taken is commensurate with size of
loan and desist from asking additional collateral security by way of guarantee
where the land mortgaged is considered adequate.
Also branches should desist from the practice of taking collateral
security/third party guarantee/mortgage of land where it has been indicated that
such security is not to be taken.
(v)
In case the land is
on lease/rent basis or otherwise where borrower’s title to land does not
permit him to create a mortgage thereof, suitable guarantee may be accepted as
an alternative security.
6.
RATE OF INTEREST:
The rate of interest should be charged as per Loans & Advances Circulars issued by Head Office from time to time. Presently, rates of interest for agriculture advances are as under:
|
Loan |
Rate of Interest (per annum) |
|
Investment
Credit: (i)
Upto
Rs.2 lakh (ii)
Above
Rs.2 lakh |
10.50% 11.50% |
As per HO instructions both working capital and term loans are to be
clubbed together to determine the size of the loan for the purpose of fixing the
rate of interest for all agriculture borrowers.
NOTE:
(i)
Payment of interest should be insisted upon only at the time of repayment
of loan instalments as fixed.
(ii)
Interest on current dues should not be compounded.
(iii) Application of
interest:
Interest on agricultural loans should be applied at
the end of half-year but it should not be debited to borrower’s account.
Instead, it should be debited to a separate account opened in Subsidiary
General Ledger – “Interest Accrued on Advances to Farmers”.
On the date fixed for repayment of each instalment towards adjustment of
loan, interest due for previous half-year or part thereof should be debited to
borrower’s account by corresponding credit to the “Interest Accrued on
Advances to Farmers” head.
AS PER THE POWER CHART
It
is reiterated that the rate of interest and loaning powers should strictly be as
per Loans and Advances Circulars issued from time to time.
8.
LOAN APPLICATION AND DOCUMENTATION:
(i) Application for Agricultural Credit PNB 762 (R)
(ii) Annexure-Interview-cum-appraisal
form
PNB 812 (R)
(iii) Agreement of
Hypothecation
PNB 665
(iv) Deed of
guarantee, wherever applicable
PNB 1042
(v) Mortgage deed,
wherever applicable
PNB 1043
(vi) Letter of
Hypothecation, where delivery of vehicle
is
made subsequent to date of advance.
PNB 420
(vii) Consideration
vouchers
(viii)
Proforma invoice/bills
(ix) Photocopy of
Registration Book of vehicle
(x) Rule based lending proforma
9.
CONFIDENTIAL REPORT (CR) ON BORROWER(S) AND GUARANTOR(S):
|
(i) |
For loans upto Rs.50,000/- |
No CR to be collected. However, information furnished by the applicant in the
Application for Agricultural Credit must be verified by Incumbent
Incharge/Agriculture Officer and they will record their opinion to this
effect. |
|
(ii) |
For loans above Rs.50,000/- and upto Rs.10 lakh |
A brief CR on PNB-539(Simplified Confidential
Report on Borrower(s) and Guarantor(s) in respect of Agricultural Loans)
may be obtained alongwith the information furnished by the applicant in
the Application for Agricultural Credit PNB 762 (R) and here again, the
information furnished by the applicant must be verified by Incumbent
Incharge/Agriculture Officer; besides their report on brief CR. |
|
(iii) |
For loans above Rs.10 lakh |
Regular CR may be compiled on Bank’s prescribed
form PNB 282-B . |
Branches
shall issue letter of sanction on PNB 850, invariably, issued to the borrowers
availing loan.
Branches
shall issue loan passbook or
Statement of Account, invariably, to all the borrowers.
12.
DISBURSEMENT OF LOAN:
Loan may be disbursed in two stages i.e. initially the part of loan in
respect of purchase of
chassis may be disbursed by payment direct to dealer on behalf of borrower.
For this purpose, a Letter of Authority (on the proforma as per Appendix-I)
may be taken from borrower and amount remitted directly to dealer. Subsequently,
the remaining part of loan relating to construction of body may be disbursed in
a like manner by payment to body builders on behalf of borrowers.
Incumbents Incharge must ensure
end use of funds and keep on record the related receipts from dealer/ body
builder duly verified by borrower that he took delivery of chassis and body
which has been built to his satisfaction.
13.
INSURANCE:
Borrower will be required to obtain a comprehensive insurance policy
including civil commotion and riots with agreed bank clause. Insurance policy
will be kept on bank's records.
14.
REPAYMENT OF LOAN:
(i)
Loan
with interest will be repayable in maximum period of 48 months in suitable
instalments starting one month from the date when vehicle purchased with bank's
loan is put on road or after completion of 2 months from date of advance,
whichever is earlier. It is, however, probable that during rainy season or due
to other eventualities, the borrower may not be in a position to pay monthly
instalment in a month or two during a year. Accordingly, additional period of 6
months may be allowed to borrower for repayment of loan. Thus, 48 instalments
towards adjustment of loan for purchase of new vehicles may be spread over a
period of 54 months.
(ii)
In event
of three consecutive defaults in payment of instalments, the entire balance
outstanding against borrower shall, at the discretion of bank, become due for
payment and bank shall have the right to initiate appropriate recovery
proceedings as provided by law. Bank
may also seek assistance of Motor Vehicles Authorities in this regard.
Overdues for the purpose of maintenance of Demand, Collection and Balance
(DCB) register shall be calculated on annual basis.
(iii) H.O.
may consider, on merits, extending repayment period to
.
maximum 60 months.
(iv) Instalments
may be fixed on higher side in the beginning as chances of
break down/ repair expenses are minimal during the initial year(s).
15.
PERIODICAL INSPECTION:
Borrower will be required to produce the vehicle financed alongwith Registration Certificate, the Permit, Certificate of Fitness, Certificate of Insurance, Certificate of Road Tax paid and Certificate in respect of other taxes pertaining to plying the vehicles for inspection once in every half-year on the date fixed by the lending branch office. Certificate of Inspection of vehicle financed PNB 551 will be got filled in and signed by the borrower. Incumbent Incharge of the lending office will verify (if necessary, by reference to office of relative issuing authorities) that Documents/Certificates cited above are in order and will sign certificate appended to form: PNB 55I which will, thereafter, be filed with the relative loan documents.
16.
CLASSIFICATION:
(i)
Loan
scheme will be classified as 'Direct Agriculture Finance.
(ii)
Loan to
farmers having land holding of 5 acres and less will fall in the category of ‘Advances to Weaker Sections’.
APPENDIX-I
LETTER
TO BE TAKEN FROM THE BORROWER AUTHORISING THE BANK TO MAKE PAYMENT TO THE DEALER
ON THE BORROWER (S) BEHALF
The Manager,
Punjab Gramin
Bank
B.O:________________
Dear Sir,
Reg:
Loan for Rs________________________________ granted to me/us.
*1.
With reference to the above loan sanctioned to me/us, I/we have executed
Loan Agreement for Rs.__________(Rupees_________________________________)
dated______________ in your favour, I/we request that the proceeds of
this loan together with the amount of Rs.__________ (Rupees________________)
already deposited by me/us with you should be paid, on my/our behalf, by a
Draft/cash order to Shri/M/s______________________________________ from whom
I/we am/are purchasing_______________________. The relevant receipt for the purchase will be
deposited by me/us with you after endorsing thereon the receipt of
the_____________________________ concerned from the said seller.
*2.
With reference to the above loan sanctioned to me/us, I/we have executed
loan agreement of Rs._____________(Rupees____________________________) dated
_____________ I/we request that the proceeds of this loan sanctioned be
paid to the supplier/seller, i.e. Shri/M/s______________________________ from
whom I/we am/are purchasing__________________. The relative receipt for the
purchase will be deposited be me/us with you after endorsing thereon the receipt
of the ______________________ concerned from the said seller.
Yours faithfully,
Place:_______________
Date:_______________
_____________________
_____________________
Borrower(s)
* Strike
whichever is not applicable