ASSAM GRAMIN VIKASH BANK

(A joint undertaking of Govt. of India, Govt. of Assam & Punjab National Bank)
Head Office: G. S. Road, Bhangagarh, Guwahati –781005 (Assam)
Phone No: 0361-2131604/ 605/ 606, 2131607 Fax No. 0361-2463621, e-mail: agvbank@yahoo.co.in
CIRCULAR: AGVB/CR/ 08 / OM- 20 /2022-23 Date:12.05.2022

All Branches
All Regional Offices
All Departments at Head Office, RSETIs

Reg: Launching of “AGVB Dairy Loan Scheme”.

India is endowed with the largest livestock population in the world. It accounts for about 57.3% of the world’s buffalo population and
14.7% of the cattle population. Thus, there is a tremendous scope/potential for increasing the milk production through profitable
dairy farming.

Today, dairy farming is a fast-growing business in India. Due to higher consumption and change in lifestyle, it has become a huge
scope for dairy sector.

Though there was no dedicated loan scheme in the Bank towards financing the dairy sector, financing to this sector has so far been
done under the DEDS Scheme (Dairy Entrepreneurship Development Scheme) implemented by NABARD. Also direct financing to
dairy sector has been done as normal project financing.

Now, with a view to boost extension of credit to the dairy sector, a dedicated scheme named “AGVB Dairy Loan Scheme” is
introduced.

The main objective of the scheme is to extend assistance for setting up small dairy farms and other components to bring structural
changes in the dairy sector and to generate self-employment and provide infrastructure mainly for unorganized sector. The scheme
aims at helping the dairy farmers in setting up new farming unit or expansion of existing units. Other key expenses of such units
are also covered in this scheme, such as dairy production machinery, processing, storage, packaging, transportation etc.

It is to be noted that the “AGVB Dairy Loan Scheme” shall be a different scheme from the existing DED- Scheme (Dairy
Entrepreneurship Development Scheme) implemented by NABARD. As such, proposals financed under the DED-Scheme
shall be governed by the terms and conditions of that scheme (DED) only as and whenever the DED scheme is available.

 The scheme details of “AGVB Dairy Loan Scheme” is enclosed in Annexure-I.

 Operational guidelines of the scheme is enclosed in Annexure – II.
 Indicative unit-cost is enclosed in Annexure – III.

The effective and widespread marketing of the scheme should be initiated immediately by all concerned. As such, all concerned
are advised to go through the contents of this circular and come forward strategically for marketing of this loan product effectively.

This circular comes into force with immediate effect.

GENERAL MANAGER

Encl. As stated
 ANNEXURE-I

Terms & Conditions of the Scheme

1. TARGET GROUP Farmers.

Individual Entrepreneurs.

SHGs.

JLGs.

FPOs/FPCs.

Dairy Cooperative societies.

Milk cooperative societies.

Milk Federations.

2. PURPOSE Establishment of small dairy units with crossbred cows/indigenous descript milch cows/

graded buffaloes, up to 10 animals (For SHGs, Cooperatives, FPOs etc., 2-10 per
member)
 Purchase of milking machines/milk testers/bulk milk cooling units (up to 5000 lit capacity).
 Purchase of dairy processing equipment for manufacture of indigenous milk products.
 Establishment of dairy product transportation facilities and cold chain.
 Cold storage facilities for milk and milk products.
 Establishment of private veterinary clinics.
 Dairy marketing outlet/Dairy parlour.
3. CLASSIFICATION Loans under this scheme shall be classified under Priority Sector.
4. MARGIN Up to Rs. 1.60 Lakh NIL
Above Rs. 1.60 Lakh 15% to 25%
5. SECURITY PRIMARY:
 Hypothecation of the assets acquired out of Bank Loan.

COLLATERAL:
For loans up to Rs. 1.60 lakh: NIL
For loans above Rs. 1.60 lakh: As per the norms stipulated in the extant Lending Policy and
the Circular on Credit Risk Mitigation.

Personnel guarantee of board/managing committee/Co-borrowers as the case may be

obtained.
6. CHARGES
Processing Charge
Documentation Charge
Mortgage Charge As Per Bank’s existing circulars
Supervision subject to be changed/modified from
CRIF/CIBIL enquiry Charges time to time.
CERSAI Charge
Pre-Payment Charge

7. SANCTIONING As per Bank’s existing circulars on Discretionary powers communicated from time to time,
AUTHORITY subject to be changed/modified by the competent authority of the Bank in future.

8. APPRAISAL OF Appraisal of the loan proposals shall be carried out as per the prescribed norms of the Bank.
PROPOSALS Scheme prepared/vetted by a competent authority needs to be submitted by the applicants
along with the application and the same shall be analyzed for assessment of the viability of the
project.
The basic financial indicators (DE Ratio, DSCR etc) should conform to the benchmark level
prescribed in the Lending Policy.
All other guidelines for assessment of credit proposals needs to be adhered to.
9. DISBURSEMENT Purchase of Assets/Cattle:
The payment (loan amount + margin money) shall be disbursed directly to the seller of the
Asset/Cattle through Demand Draft/Bankers’ Cheque.
Construction of Asset:
Borrowers' margin will be utilized first or at least proportionately along with progressive
disbursement of the loan in case of construction of an Asset. Disbursement of loan will be
made in phases depending upon the progress of construction of the Asset.

10. RATE OF INTEREST As per Head of circular AGVB / CR /38/ OM -155/ 2020-21 Date: 04-02-2021, subject to
change from time to time.
11. MORATORIUM Maximum 06 months.
12. REPAYMENT  Loan along-with interest is to be re-paid in equated monthly/quarterly installments decided
based on the loan amount, Income generation of the unit.
 Interest during the moratorium period shall have to be repaid.
13. INSURANCE  Assets acquired out of Bank loan should be insured with Bank clause at borrower’s cost.
 The borrower(s) may be insured with Group Credit Life Insurance Policy for the overall limit
of loan availed.
Note: Both the Premium of General Insurance and Credit Life Insurance may be considered as
part of the project cost.
14. REALIZATION OF  Deduction of instalments from operating SB/CA/CSP/CC A/c through Authority Letter
LOAN of Standard Instruction.
INSTALMENTS
 NACH Mandate.
 03 (Three) numbers of undated cheques with undertaking from the borrower(s) at the
time of availing loans to the effect that in the event of failure of repayment as per
stipulated EMI, the Bank will have liberty to place the said cheque for recovery of
dues.
15. DEVIATION As per Bank’s Lending Policy.
 Annexure - II
OPERATIONAL GUIDELINES
1. COMMAND AREA
(Area of Operation) As per Lending Policy of the Bank.
2. KYC COMPLIANCE  Borrower(s) & Guarantor(s) should have existing SB/CD/CSP A/c with full KYC
compliance.
 Opinion Sheet with photograph of Guarantor(s), as the case may be, should be
drawn by branch.
 Branches and Regional Offices will verify CRIF Highmark and/or CIBIL report
antecedents of borrower(s) & guarantor(s) as per existing guidelines of the Bank.
 Due diligence of borrower with cross checking of information be done.
 Abundant caution shall be taken while considering sanction of loans to a walk-in-
customers (who is not a Bank’s existing customer for less than 6 months) about the
credentials and repayment capacity of the borrower.
3. PRE-SANCTION Branch official should conduct Residence & Business verification of applicant(s) &
INSPECTION OF Guarantor(s).
RESIDENCE, Pre-sanction Inspection:
EMPLOYMENT,  To be conducted by the officers of Branch independently (preferably jointly).
BUSINESS
 Status of the landed property, genuineness and authenticity of the land documents
and title chain of the mortgagable property should be verified by Branch Officials.
 Joint Physical verification of the mortgagable property should be conducted by
Branch Officials.
 Bank’s prescribed formats for Pre-sanction inspection and Physical verification of
mortgageable property are to be used.
4. MONITORING OF Pre- Disbursement Stage:
LOAN  Verification should be made on borrower’s residence business, IT return (If any),
NACH mandate (signature & other details) and bank statement etc.
 Sanction letter to be issued incorporating all the terms & conditions.
 Documents are to be executed before disbursement of loan.
 Care should be taken for noting S.I /NACH of the borrower.
Disbursement Stage:
Ascertain the end use of fund. Ensure that Asset is created.

Post Disbursement Stage:

 Ensure Bank’s name is registered in Insurance Policy as financier.
 Ensure that the loan instalment is realized regularly and the loan remains in
standard category.
 Ensure all the Receipts routed through the Current/SB Account maintained with our
Bank (if applicable)
 Interact with borrower regularly through periodic inspection of the unit.
 Monitor the operation/ transaction of loan a/c on monthly basis.
 Any deviation in non-payment of EMIs should be detected and immediate corrective
action for recovery need to be initiated.
 Annexure - III
Indicative unit cost

Establishment of small dairy units with crossbred cows/ indigenous descript milch cows / graded buffaloes up to 10
animals (For SHGs, Cooperatives, FPOs etc., 2-10 per member).
Detailed scheme/project report from a competent authority needs to be submitted with proposal.
The indicative cost are subject to change from time to time as revised by the Bank
S No Items of investment Indicative cost
1. Cost of animal Maximum Rs. 7.00 Lakh for 10 animal unit minimum unit size
is 2 animals with an upper limit of 10 animals
2. Cost of construction of the shed @65 sqft per cow/buffalo @Rs.150.00 per sqft.
3. Transportation cost of animals Rs. 10000.00 at Rs. 1000.00 per animal
4. Purchase of milking machines/ milk testers/bulk milk Rs. 20.00 Lakh
cooling units (up to 5000 lit capacity).

5. Insurance cost @5% of the cost of animal

6. Others As per scheme prepared by competent authority.
Other purposes
1. Purchase of dairy processing equipment for As per scheme prepared by competent authority.
manufacture of indigenous milk products.
2. Establishment of dairy product transportation As per scheme prepared by competent authority.
facilities and cold chain.

3. Cold storage facilities for milk and milk products. As per scheme prepared by competent authority.

4. Establishment of private veterinary clinic As per scheme prepared by competent authority.

5. Dairy Marketing outlet/Dairy parlour. As per scheme prepared by competent authority.