AGRICULTURAL BANKING – QUESTIONS / ANSWERS.

1. Define the following categories ? a. Small Farmer : Small farmer is one whose land holdings do not exceed 5 acres of dry or 2.5 acres of wet land. b. Marginal Farmer: Marginal farmer is one whose land holdings do not exceed 2.5 acres of dry land or 1.25 acres of wet land. c. Agricultural labourers: A person without any land other than homestead and deriving more than 50% of his income from agricultural wages as labourers. d. Non-agriculture/ Rural artisans: Residents of the villages 50% of whose income is derived from non-agricultural sources

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When did the NABARD come into existence? Based on the recommendations of the Committee for review of arrangements for institutional Credit to Agriculture and Rural Development (CRAFICARD) National Bank for Agriculture and Rural Development (NABARD) came into existence on 12.7.1982. What are the functions of NABARD? The functions of NABARD are broadly classified into three as given hereunder: a) CREDIT: (I) It provides short term credit to SCBs, RRBs, and AFIs(15months), (II)Medium Term loans to SCBs, RRBs, SLDBs and AFIs (18months to 7 years) (III) Long Term credit to SCBs, SLDBs, RRBs, commercial Banks, AFIs (7years to 15 years): b) Development: i. Co-ordination and review, ii. Institution building iii. Assistance to GOI, RBI & State Govts. iv. Agency to GOI, RBI and State Govts., v. Direct loaning to approved govt., projects. vi. Training and expertise skills to bank officials Regulatory: i) Inspection of Co-operative banks and RRBs,

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What are the various stages involved in the preparation of Dist. 6. Automatic refinance for all government sponsored programmes. What is a crop loan? It is a production credit sanctioned for taking-up seasonal agricultural operations. Category A: Recovery 60% and above– Unrestricted Refinance. 5. Advances? Banks have to lend 18% of the Net Bank Credit to agriculture segment. 7. 1.and lighting. 4. What is a subsistence farming? Subsistence farming arises when the land holding is very low and the surplus generated from the farm operations is so meagre that while it may cover the cost of cultivation it may not be adequate to meet the farmer’s family expenses. advances under direct agriculture should be 13. Schematic refinance for the project approach taken–up by Banks for development. Out of this.5% may be under indirect advances. Credit Plan? Branches prepare their credit plans for the forthcoming financial year based on the village credit plans. The digested manure will be rich in nutritive value and can be used as a manure. What is a bio-gas plant? It is an installation where cattle dung is digested with the help of microbes. The lead Bank of the district would consolidate the Block plans into Annual Credit plan of the district. As a result of this ‘methane gas’ is produced which is helpful as fuel for cooking . Category B: Recovery below 60% restricted refinance. What is the eligibility criteria for drawing NABARD refinance? NABARD provides refinance in two ways as under. The branch credit plans are consolidated into Block Credit plans. 10.5% and the balance of 4. 8. 2.ii) Permission for opening of new branches of cooperative banks and RRBs. The eligibility for drawing refinance is linked to recovery performance of the Branch. What are scales of finance for crop loans? . 9. What is the ‘bench-mark’ to be achieved under Agri.

Kharif Bajra & Oil Seeds Premium Rate 3. What are the objective of the NAIS? i. 11. 15.e. high value inputs and higher technology in agriculture. Who are the farmers to be covered under RKBY? All farmers including share croppers. Loanee farmers b) On a voluntary basis: All other farmers growing the notified crops i. who opt for the scheme. ii. What are the crops covered under NAIS? a. What is NAIS? National Agricultural Insurance Scheme (NAIS) Insurance scheme introduced by the Govt. tenant farmers growing the notified crops in the notified areas are eligible for coverage. The scheme covers the following groups of farmers: a) On a compulsory basis: All farmers growing notified crops and availing seasonal agricultural operation (SAO) loans from financial institutions i. millets & pulses) b. 16. particularly in disaster years. To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crops as a result of natural calamity. 13. In case of loanee farmers the SI would be at least equal to the amount of crop loan advanced. What are the premium rates? S. Cotton & potato.e. a farmer may also insure his crop beyond value of threshold yield level upto 150% of average yield of notified area on payment of premium at commercial rates. 14. Sugar cane. Food crops (cereals. iii. of India. To help stabilize farm incomes. is the revised Crop 12. Non-loanee farmers. To encourage the farmers to adopt progressive farming practices. Oilseeds. c.The District Technical Committee / State Level Bankers’ Committee will decide the amount of loan to be financed for each crop grown in the State.No Season Crops 1. However.5% of SI or actuarial rate whichever . What is the sum insured/Limit of coverage? The Sum Insured (SI) may extend to the value of the threshold yield of the insured crop at the option of the insured farmers. pest & diseases.

5% of SI or actuarial Rate whichever is less 3. What are the levels of indemnity? Three levels of indemnity.e.1999. 90%. Pulses & oilseeds) Kharif & Annual Rabi Commercial/annual Horticultural crops 1. However.0 % of SI or Actuarial rate whichever is less. What is the subsidy on premium available? 30% of the premium is allowed in respect of Small & marginal farmers to be shared equally by the Government of India and State/UT governments.4.5% of SI or Actuarial rate. Medium risk. This . 80% & 60% corresponding to Low risk.Other Crops (cereals. millets & Pulses) 2. whichever is less 2. INDEMNITY: shall be calculated as per the following formula.f 1.) 20.V) in yield of past 10 years data. (Shortfall in yield/Threshold) X Sum Insured Shortfall in yield = (Threshold yield – Actual yield for the defined area. What is threshold yield? The threshold yield or guaranteed yield for a crop in an Insurance Unit shall be the moving average based on past three years average yield in case of Rice & wheat and five years average yield in case of other crops. the farmers of unit area may opt for higher level of indemnity on payment of additional premium based on actuarial basis. & High risk areas shall be available for all crops based on the coefficient to variation (C. viz. Actuarial rates 17. Other crops (cereals. 2. 18. Rabi Wheat is less. The premium subsidy will be phased out in a period of three years subject to review of financial results and the response of farmers at the end of the first year of the implementation of the scheme. 19. multiplied by the level of indemnity. millets. Write a brief note on SGSY? Swarnajayanthi Gram Swarojgar Yojana (SGSY) was introduced as a comprehensive Poverty alleviation programme w.

C. What is the amount of NABARD refinance available? 100% refinance is available to Banks financing SHGs. MWS. Families living below the poverty line (BPL) will be considered for assistance.C/STs 50%. What securities are to be obtained for the loans sanctioned to SHGs? The advances made directly to the SHGs are to be treated as clean and therefore no collateral security should be obtained. 25.10.00 lac (75% of the value of the produce) can be granted to a farmer against the pledge or hypothecation of produce..in respect of SC/STs. including warehousing receipt. 21.1. What are the four phases involved in the promotion stage of the SHGs? a. Group savings should not be taken as collateral security. Performing 24. It is treated as a direct advance. 22. IRDP. The crop loan should be adjusted first from the produce marketing loan.p.a).000/.500/. Subsidy :50% subject to a maximum of Rs. Norming d. Who is Prof. 27. Write a brief note on Kisaan Credit Cards (K. 23.in respect of others. Subsidy :30% subject to a maximum of Rs. Mohammed Younus of Bangladesh experimented the concept of SHGs in 1975-76 and found that the concept is well taken by the people below the poverty line. Mohammed Younus? Prof. SITRA. Forming b. What are the reservations provided under the scheme? What is the amount of subsidy available? S. Disabled/handicapped …3% Subsidy:50%subject to a maximum of Rs. What is produce marketing loan? Under the scheme a maximum advance of Rs. TRYSEM.2000/.in three years.7. 26.13000/ to Rs.(the range of poverty lines of various states of India as per the ixth Five Year Plan is Rs.C) ? .replaces six schemes viz. GKY. DWCRA. It is expected that the swarojgaris (beneficiaries) will earn a monthly income of Rs.19650/.25 lacs in respect of SHGs. Women 40%. Storming c. The farmer should have availed crop loan from the branch. The advance can be granted for a maximum period of 12 months.10.

Irrigation) II. The salient features of the scheme are as under: a.Power/mechanisation/equipment. Number of withdrawals: Any number of withdrawals and repayments. On–farm development. electricity charges etc. d.Agricultural Cash Credit f. 32. Nature of facility:-Revolving Cash Credit limit valid for 3 years. Accounted for under:. 31. crops grown and relevant scales of finance.10000/-. Farm. Describe how limits are fixed in crop loans? The crop loans are need based finance.C. The cost of cultivation of each crop determined by the District Technical Committee should be adopted for fixing the limit. To some extent farmers’ contingent needs are also to be taken care of to the extent of 20% of the limit. subject to a maximum of Rs. Security. margin and discretion:-Same as applicable to agricultural advances. What are the six categories of Agricultural Term Loans? I. withdrawals within the limit. (Land development.C):Fixed on the basis of land-holdings. Also the entire credit requirements of the farmer for agricultural production and ancillary activities related to the same such as maintenance of agricultural machinery / equipment. 30. documents. c. What is incremental income? Incremental income means the additional income as a result of implementation of a development scheme. In respect of others 15 to 25% margin is stipulated 29. Credit limit (Under the K. 28.This scheme will be implemented in all the branches. Drawal of funds:-Cash Withdrawal will be made through withdrawal slips accompanied by Kisaan Credit Card Passbooks (No cheque book need to be issued) h.000/. g. e. . What is an Agricultural Term Loan? It is an investment credit provided for creation of a “Capital Asset” which is capable of generating economic benefits during its economic life. Eligibility : -All Agricultural Crop loan borrowers b. 25. What is the margin stipulated for crop loans? In respect of loans upto Rs.no margin is stipulated. Pass book :-Kisaan Credit Card – cum – pass book will be issued.

Dark Area: Where discharge or exploitation is more than 85% of recoverable recharge. Water-shed development. VI. How is irrigation projects classified? The classification of irrigation projects is based on the area under the command of the irrigation source. The classification is as under Project Major Medium Minor Source of water Surface water Surface water a.Coffee.Sheep/goat rearing. power tillers. 36.000 ha &. IV.000 ha More than 2. coldstorages) Miscellaneous (Bio-gas. farm equipment) Horticulture/Plantation/Forestry. Upto 10. What is irrigation? Irrigation is an artificial application of water for crop production. The farmer should be in a position to use the tractor for 600 hrs a year on his own farm lands and for custom hiring. C. V. The farmer (s) should own at least 4 acres of perennially irrigated land or corresponding acreage of dry land capable of yielding adequate surplus. What is the eligibility criteria for tractor financing? A. C.eucalyptus) Diversified/allied activities.III. ware-houses. Intensive cultivation is possible with assured irrigation.000 ha Upto 2. Surface water b. sericulture) Marketing & Storage (Construction of godowns. 34. conversions) 33.poultry. transport vehicles. B.coconut.000 ha 35. White Area: Where discharge or exploitation of water is less than 65% of recoverable recharge B. . (Tractors.000 ha Upto 2. 50% of repayment obligation (Instalment + Interest) should come by way of incremental income from farmer’s own fields. What are the stipulations for different areas based on ground water availability? A. Grey Area: Where discharge is in between 65% & 85% of recoverable recharge. (Dairy.(Mango. Ground water Area benefited More than 10.

Mulberry cultivation. Silk-Worm rearing from larva to cocoon . 1. Give the names of a few breeds of dairy animals for bank financing? Cows : Jersey. 40. Poultry feed manufacturing. What is the maximum period for repayment of dairy loan? The period of repayment should not exceed six years. Commercial egg production. 2. d. Ongole Buffaloes : Graded Murrah 39.50 Kgs in eight weeks time. 42. The birds attain an average weight of 1.37. c. Hatchery. 43.300 eggs in 72 weeks period. What is silk production cycle? Silk production cycle known as sericulture includes four distinct activities but at the same time they are inter related and form part of the one activity of getting finished silks. 46. 41. 38. What is the repayment period prescribed for poultry loans? After one year of gestation. How many eggs a layer is expected to lay? A layer bird lays 280 . What are the two systems of rearing? There are two common types I) Deep-litter system II) Cage system. What is a broiler variety? These birds are for table purpose. What is the maximum period allowed for repayment of tractor loan? The tractor loan is to be repaid in nine years in half-yearly instalments. Holstein Friesian. b. Commercial broiler production. the term loan instalments should be repaid in 72 monthly instalments. 45. Poultry finance Includes/ a. 44. What is sericulture? Sericulture refers to cultivation of mulberry and rearing of silk worms which are the larvae of silk moth.

Post harvest and processing projects. Hybrid seeds d. i. 47. 48. Manufacture of malted food E. Improved packaging. Meat/poultry processing units D.3. What are Hi-tech agricultural production projects? i. What are post harvest & processing projects? A. Marine Food Processing C. royal jelly. Production iii. propolis. Food processing f. F. iii. 49. Hydroponics iv. Acquaculture. Bio-mass utilization. Bio-tech projects. h. Animal vaccines g. Floriculture c. Silk reeling which transforms cocoons into continuous filament called raw silk. Industrial enzymes j. apitoxin etc…The place where bee keeping is practised on commercial scale is called ‘Apiary’. What are the categories in ‘High-tech Agriculture’? ‘High-tech Agricultural Projects are broadly classified into three categories: i. Tissue culture. Hi-tech agricultural production projects. New bio-products. b. Silk weaving in which silk filaments are twisted and woven into silk yarn. 50. Manufacture of resins. Cold storages B. What is apiculture? Apiculture or bee keeping is rearing of honeybees in man made hives for the purpose of pollination and obtention of honey. Controlled environment agri. . Drip and sprinkler irrigation ii. Un-conventional agricultural products 51. What are Bio-tech projects? a. ii. The other products obtained from this activity are bee-wax. Apiculture e. 4.

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