Name of the Scheme

IOB Krishi Vriddhi

Purpose

• Purchase of fixed assets such as machineries, equipment /construction of factory/ warehouse/ cold storage/ poly house/ rural godown/ office and its interior decoration & furnishing/installation of solar systems/ Agri clinic and Agri Business centers etc.
• Purchase of Commercial vehicles/ tractors / power tillers /other farm equipment's, all activities related to farm mechanization etc.
• For raising kitchen/flower gardens, small orchards, roof gardens and landscaping etc.
• Purchase of land for the purpose of cultivation alone to Small/Marginal/Tenant/Sharecroppers.
• Establishment of fruit orchards, plantations and cultivation of vegetables/flowers in farm and under controlled condition like greenhouse/poly house, integrated farming etc. including purchase of implements/tools/equipment's etc.
• Farm development activities such as Land levelling, bench terracing in Hills, terracing/bunding, land reclamation, fencing etc.
• All the activities supporting above including pre and postharvest activities.
• All irrigation activities such as digging of well/construction of pump house/sprinklers/drip irrigation/lift irrigation etc. and services supporting all the above activities.
• Hi tech Agri projects including purchase of drones etc.
• The lists mentioned above are indicative and all other activities related to agriculture can be considered under this scheme.

Classification

Priority Sector- Farm Credit, Agri infrastructure and Ancillary services

Target Group

Individuals, Proprietary concern, Partnership Firm, Private limited company, Public limited company, LLP, OPC, NBFC's etc.

No JLG/SHG/FPO's to be financed under this scheme

Nature of Facility

Term loan & need based working capital (FB & NFB).

Eligibility

• Project should generate sufficient income such that loan can be repaid from the financed activity, without relying on other income. While the desirable debt service coverage ratio would be above 2:1, average DSCR of 1.5:1 and minimum DSCR of 1.2:1 can be accepted on merits. However sanctioning authority RLCC and above are permitted to relax the benchmark on merits of the case and the same to be properly justified in the appraisal note. DSCR need not be computed for projects where income is generated from cultivation of crops.
• The projects/ activities considered under the scheme should have all requisite permissions/ licenses/ approvals from competent authorities wherever applicable.
• Applicant should have sufficient knowledge/ experience in the activity undertaken.
• For projects related to irrigation, minimum land of 3 acres should be available in case of individuals.
• In case or purchase of tractors, minimum 2 implements to be purchased for effective use of tractors. However, if the applicant is already possessing 2 or more implements, then purchase of new implements need not be insisted.

Loan Quantum

No Minimum & No Maximum

Margin

Minimum 20% irrespective of the quantum. However, RLCC and above can consider reduction in margin up to 10%.

Security

Up to Rs. 1.60 Lakhs 

Prime security:

Hypothecation/mortgage of assets created out of bank finance.

Collateral Security: Nil 

Above Rs.1.60 Lakhs

Prime Security:

Hypothecation/mortgage of assets created out of bank finance.

Collateral Security:

-Mortgage of Immovable property.

-Any other security acceptable to bank.

-Overall collateral coverage should not be less than 100% of loan amount, however, deviation in collateral coverage can be considered by the following committees:

• RLCC can relax collateral coverage Up to 75%.
• HLCC(GM) can relax collateral coverage Up to 60%.
• HLCC(ED) can relax collateral coverage Up to 40%.
• CAC can consider relaxation in collateral coverage below 40%.

Repayment

Maximum repayment shall be 7 years (including moratorium period) for purchase of tractors/ commercial vehicles/power tillers/other farm equipment's and all activities related to raising kitchen/flower gardens/roof gardens etc.

For all other activities maximum repayment period can be considered up to 12 years depending upon the repaying capacity.

However, in all cases, the repayment period shall be fixed based on cash flow and size of the project and as far as possible, repayment of the loan proposed should be closed before expiry of 90% of the economic life of the assets financed by the bank.

Holiday Period

New cultivation of long-term crops i.e, Mango, Citrus, Papaya, Coconut, Rubber, Tea, Pepper alone will have maximum holiday period of 5 years to achieve their economic yield.

In all other cases, maximum holiday period will be 24 months

Interest Rate

Externally Rated Accounts:

Penal Interest

As applicable from time to time

Processing Charges / Upfront Fees

Processing charges @ 0.40% of limit + GST to be collected for cash credit and NFB limits.

Upfront fees @ 0.71% of term loan amount + applicable GST to be collected.