Financing for Rural Godowns

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Financing for Rural Godowns
Features

Location:
Rural area as defined by NABARD (i.e. having population up to 50,000) are to be included in the Scheme provided there is sufficient production and availability of potentiality. The structure shall be located on a well-drained site not liable to flooding or inundation and it shall be away from a place likely to be affected by seepage water.

Capacity:
Godowns with capacity ranging from 100 MT to a maximum of 1000 MT.

Loan Amount:
2/3rd of the cost of estimation will be allowed as a loan amount. Cost of estimation should not exceed maximum of `1000/- per ton of storage capacity depending upon the major produce to be stored in the godown. The cost of estimation should not include land cost.

For the godowns of different capacities, the maximum permissible loan amounts are indicated below:

Size of the Godown Estimated Cost (Maximum) Margin Bank Loan
200 MT ` 2.00 lacs ` 0.65 lacs ` 1.35 lacs
500 MT ` 5.00 lacs ` 1.65 lacs ` 3.35 lacs
750 MT ` 7.50 lacs ` 2.50 lacs ` 5.00 lacs
1000 MT `10.00 lacs ` 3.35 lacs ` 6.65 lacs

Repayment schedule:
Quarterly instalments within 12 to 15 years, including a grace period of 12 months. Normally,the construction of godown should be completed with 6 months of disbursement of Bank Loan.

Rate of interest:

  1. Upto `2.00 lacs @ PLR
  2. Above `200 lacs @ PLR+1%

Security:

  1. Primary: Equitable mortgage of site/godown.
  2. Collateral: If tie-up arrangement is available and rentals of the godown are remitted to Bank directly, Collateral security is waived. However, third party guarantee is to be obtained wherever required, in addition to mortgage of property.

Insurance:
The godowns including stock therein are to be fully insured against all possible risks.

Precautions:
To be taken viz. selection of site, foundation type, plinth, Termite treatment, construction, maintenance etc. are detailed in Cir. No.Agr/2001-02/15 Dt. 03.09.2001.

Subsidy:
Capital Investment Subsidy is available under Gramina Bhandaran Yojana of Govt. of India for the godowns of 100 MT and above capacity.

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