SBI Produce Marketing Loan (PML)

State Bank of India (SBI) offers “Produce Marketing Loan” for the farmers. Under this scheme, the bank provides security to the farmers against distress sales of their crop production when the prices are low. In this article, we look at the Produce Marketing Loan (PML) in detail.

Objective

The primary objective of the scheme is to enable prompt repayment of crop loan dues and give liquidity to farmers to meet contingency needs. It also provides the facility of loan against the stocks stored in farmhouses, in addition to loan against warehouse receipts.

Eligibility Criteria

The farmer applicant should satisfy the below criteria to apply for the Produce Marketing Loan (PML).

All non-defaulter borrowers of the bank, those who can store the produce either in their own farm/premises itself or in a Warehouse/cold storage\ are eligible to get the loan under this scheme.
The farmer applicants who have availed crop production loans from the branch or who have availed crop loan from other Bank or who have not availed crop loan from any Bank can avail SBI Agriculture Produce Marketing Loan.

Documents Required

The following documents/Proofs are to be furnished along with the application form:

Application form (Duly filled)
Proof of stocks at the residence of the borrower
Stock statement for valuation
Identity Proof: Aadhaar, Driving License, PAN card, Voter Identity Card, etc.
Address Proof: PAN, Valid Passport, Utility bill, etc
Godown Warehouse receipt (duly endorsed)
Bank account details.
Passport size photo of the applicant.
Any other document required by the bank

Quantum of Loan

The bank offers the loan amount to the maximum limit of Rs. 10 Lakhs whereas that depends on the crop production of 60 to 80% of values and the place of storage.

Security

Primary Security: Hypothecation of stocks. Collateral Security: The Mortgage / Charge over Land or third party guarantee for loans above Rs. 1 Lakh. Loans that are sanctioned against Warehouse Receipts (WHR):

Primary Security: Pledge of stocks.
Collateral Security: No collateral is required for the loans up to the maximum limit of Rs.10 Lakhs under the scheme.

Insurance for Produce Marketing Loan

If the stock value exceeds the limit of Rs. 15000/-, then cover is provided for the full value from the approved insurance company.

Margin Money

The loan sanctioned that is against goods stored in Farmer’s godown will be 40%, and the loans sanctioned against Ware House Receipts (WHR) will be 20% to 35%.

Repayment of Loan

The loan has to be reimbursed within the maximum time frame of 12 months depending upon the crop, and specific circles have different caps for different models of godowns.

Application Procedure

To apply for the SBI Produce Marketing Loan (PML), the farmer applicant has to follow the below procedure: Step 1: The applicant will have to approach the nearest SBI branch to apply for the scheme. Step 2: The applicant must fill out the Produce Marketing Loan application form with all the requested details and have to attach the specified documents as required. Step 3: After completing the application form, submit it to the concerned bank official. Step 4: Upon submission, the verification process will be done by the bank official. Then, the applicant will be provided with an acknowledgement slip for further reference.