Last updated: December 19th, 2019 5:00 PM

Andhra Bank - Rural Godowns Kisan Samraksha Scheme

The Andhra Bank has launched a scheme called “AB Rural Godowns Kisan Samraksha” for creating scientific storage capacity in the rural areas. Under this scheme, the bank provides security to the farmers against distress sales of their crop production by promoting pledge financing and marketing credit. In this article, we look at the AB Rural Godowns Kisan Samraksha Scheme in detail. To know about Andhra Bank ABhivrudhi Scheme

Eligibility Criteria

The below-listed entities are eligible to apply for the AB Rural Godowns Kisan Samraksha Scheme:

• Individuals
• Farmers/Group of Farmers or Growers
• Partnership Firms
• Proprietary Firms
• Co-operatives/Agro-processing co-operative societies
• NGOs
• Self Help Groups (SHGs)
• Companies
• Agricultural Produce Marketing Committees
• Local Bodies
• Corporations/Agro-Industrial corporations

Documents Required

The required documents/records to be submitted while applying for the Rural Godowns Kisan Samraksha Scheme in Andhra Bank:

• Identity Proof: Aadhar, PAN Card, Driving License, Voter Identity Card, etc.
• Address Proof: Aadhar Card, PAN Card, Valid Passport, Utility bill, Property tax bill, etc.
• Bank account details
• Sources of funding details
• Passport size photo of the applicant
• Any other document required by the bank

Location

The entrepreneurs are free to construct godown at any location as per their commercial judgement that can be outside the limits of Municipal Corporation Area. The structure should be located in a well-drained site not liable to flooding or inundations, and it must be away from a place likely to be affected by seepage water. The entrepreneur has to decide about the capacity of the godown.

Margin Money

Margin money would be a minimum of 25% of the total cost.

Repayment Schedule

The loan has to be reimbursed within the maximum time frame of 12 to 15 Years, including a grace period of 12 months. In general, the constructions to be finished within 6 months of disbursement of bank loan. The repayments are to be paid in monthly, quarterly, half yearly or yearly instalments as per rental receipts.

Rate of Interest

The applicable interest rate is calculated as follows:

• For individual borrowers- BR + 0.75 + TP (0.25) = 11.25% per annum
• For Corporate and Non-Corporate borrowers- BR + 0.75 + TP (0.25) = 11.25% per annum (not linked to credit rating)

Security

The site and the godowns constructed are the primary securities. The collateral security is to be obtained at least 75% of the total project cost.

Insurance Coverage 

The godowns, including the stock, are to be fully insured against all possible risks.

Other Eligibility Criterion 

The Rural Godowns Kisan Samraksha scheme has been extended to provide finance to the following:

Purchase of Rural Godowns

1. Unit Cost: The godown cost as per the approval of the Engineer’s Valuation report or the cost the godown as per the sale agreement whichever is less.
2. Bank Loan: Unit cost of 75% + Cost incurred towards stamp duty and registration charges of 50%
3. Repayment period: 5 to 7 years or the remaining period of the Godown as certified by the Engineer whichever is less

Godowns eligible for purchase:

• • It should not be more than 10 years old for the purchase of proposed Godown.
  • Godown must be as per the specifications of Food Corporation of India (FCI)
  • The remaining validity of the Godown must not be less than 10 years to be certified by an approved Engineer.

To undertake repairs to the existing Godowns

1. Unit cost: Unit cost is calculated and fixed based on the reports prepared by the Approved Engineer for Repairs or value of the Godown valued 20% by Approved Engineer whichever is less.
2. Bank Loan: 60% on the eligible loan amount
3. Repayment period: 3 to 5 years or remaining validity of the Godown as certified by the Engineer whichever is less

The below-listed Godowns are eligible for repairs:

• • Godowns which are constructed after 5 years are eligible for the repairs.
  • The remaining life of the Godown must be a minimum of 10 years to be certified by Approved Engineer
  • Godown must be as per the specifications of Food Corporation of India (FCI)
  • Godowns are free from any encumbrances and no outstanding loans with other banks
  • Borrowers who have availed finance for the purchase of Godown are eligible for availing finance to undertake repairs after five years of the loan availed for the purchase.

To apply for the AB Rural Godowns Kisan Samraksha, the applicant has to approach the nearest branch.