Bangiya Mahajan Mukti Yojana
- Debt Swapping Scheme aims at providing adequate and timely credit as a debt refinance product towards indebted amount from non institutional sources like money lenders, fertilizer and farm input dealers etc. to the Small and Marginal Farmers, Agricultural Labourers, SHGs engaged in agricultural activities. It may be taken note of that Marginal farmers are those who own land not exceeding 2.50 acre of irrigated land and Small farmer are those who own land not exceeding 5acres of land. The objective is to mitigate the acute distress of the indebted farmers to enable them to redeem their outstanding dues to such lenders so that they become free of the debt burden with exorbitant interest rate.
- The scheme will enable our branches to extend finance to farmers for paying off non-institutional loans and also to meet their production needs.
Area of Operation:
The scheme would be operated through all the rural and semi urban branches of the Bank.
- The Scheme will cover all existing as well as prospective BKCC holders, who are indebted to non-institutional lenders, in the operational area of the branch.
- The debt swapping scheme will be extended to a farmer provided the proposed borrower is engaged with some productive agriculture activity and the amount of surplus after meeting the minimum subsistence need of its' family is sufficient to meet up the installment of loan amount.
- The indebted farmers are required to satisfy the Bank regarding indebtedness from the Non institutional Lenders stating the name and address of the Non Institutional Lenders, amount of debt, date of creation of debt, outstanding Debt as on date of application, terms / conditions, Securities held, if any, and other relative details.
- The farmers should not be defaulters to any other Bank or other financial institutions.
Maximum up to 65 years of age at the time of taking loan. Above 65 years of age, loan may be allowed with a co-borrower who should necessarily be a family member.
- The Branches may take the assistance of the Farmers' Clubs, SHGs formed in the area and Panchayat Authorities/ Municipality / Corporation, etc. for identification of the indebted farmers to the Non-Institutional Lenders.
- Besides, discrete enquiries should be conducted by the Branches to ensure the indebtedness of such persons.
- Certificate from the Pradhan / Members of Gram Panchayat / municipal commissioner / councilor in respect of Non-Institutional Debts of the applicant may be obtained.
- Care should be taken to ensure that the debt of the borrower from the Non- Institutional source is genuine and not created by the borrower to avail this facility.
Quantum of Loan:
- The loan limit will be 100% of the outstanding amount of Non-institutional loan for agricultural purpose or Rs 25,000/- whichever is lower as a secured Term Loan.
- Besides, the applicant shall be financed for crop production or other agricultural productive activities through BKCC.
- Contingency expenses, including Consumption loan (Maximum Rs 10,000/) may also be provided to the farmers as per existing guidelines of the Bank on BKCC.
- However total limit to an individual shall not exceed Rs 50000/-normally. In case of excess limit for an individual loan, permission is to be obtained from the concerned Regional office.
Method of assessment:
- For the indebtedness taken over from non-institutional lenders, Gross DSCR of 1.75 is to be maintained.
Gross DSCR= (Net profit + interest) / (Aggregate Installment in a year + Interest) Net profit will be calculated after taking into account projected post development income from agriculture and non agriculture sources less expense (Cost of production for farming activity and family consumption) of the farmer in a year.
- The loan limit will be fixed based on the assessment of Annual Gross profit/income and repayment capacity of the indebted person.
- 40% of the Annual Gross profit/income will be reckoned as the Annual family expenses of the borrower.
Nature of Loan Account:
The loan will come under Term Loan and will be classified under'Direct Lending to Agriculture'. The loan is to be made through KCC (Mid Term Farm Loan) only.
Rate of Interest:
As applicable to Direct Agriculture Advance.
The entire amount of loan along with accrued interest will be repaid within a maximum period of 5-7 years with a moratorium period of 12 months by half yearly/yearly installment(s) depending on the cash flow of the principal activity of the borrower.
- All the existing Primary securities available with us should be extended to cover the loan under the proposed scheme also.
- To create charge over the assets created out of any productive Agricultural loan.
The Branch Manager will sanction the loan under his discretionary power and report to the Regional Manager through monthly D.P statement.
Please contact your nearest BGVB branch for further information.
Terms & conditions apply.