Formed under the aegis of the Regional Rural Bank act of 1976, the Kerala Gramin Bank was formed after the Notification from the government requesting for the amalgamation of the 2 regional banks, North Malabar Gramin Bank and South Malabar Gramin Bank. With total business of around RS 20,000 Crore, the Kerala Gramin Bank is one of the country’s largest regional rural bank with over 565 branches spread across the great state of Kerala.
The bank aims to improve the standard of living among the rural, agricultural and weaker sections of the society including SC/ST classes by providing comprehensive financial solutions. With a rich history spanning 38 years, the Kerala Gramin Bank provides financial services through an extensive delivery channel with a customer centric approach.
The agricultural loans offered by Kerala Gramin Bank can be classified into Krishi Card, term loans for agriculture, loans for rubber plantation development, loans for rural marketing and setting up agri-business centres and purchasing land for agricultural use.
The Krishi card loan is designed to meet the short term financial needs such as money required for growing short duration crops or to meet expenses of maintaining farming equipment, fodder and veterinary expenses for farm animals and annual expenses of maintain fences, irrigation equipment and soil conservation structures.
The term loans for agriculture are designed to meet all the expenses incurred in any form of agriculture and its activities. Agriculture covered under this loan range from plantation to coconut to sericulture, Pisciculture irrigation systems and any other cost from the resulting activities.Term loan for rubber plantation development is designed for replanting in traditional areas or new planting in non-traditional areas and improving productivity through agro management.
Rural marketing loans are designed to expand and maintain existing marketing facilities for non-farm products. Loans for agri-business units are designed to provide additional funds required to set up such centres that provide farm equipment for hire among other services. Loans for purchase of land for Agricultural purpose allows for purchasing small and marginal holdings or bring fallow and waste lands under cultivation.
These criteria vary for each loan and are as follows
For the Krishi Card loan, the farmer needs to be an owner and cultivator. For agriculture loans to purchase land, the borrowers need to be small or marginal farmers who would own around 5 acres of non-irrigated land at the maximum or own 2.5 acres of irrigated land including. While considering an application for such a loan, the farmer is required to submit the details of the project proposal. For setting up an agri-business centre, the borrower should be a graduate in the agricultural activity be it Pisciculture or sericulture and rural marketing outlet loans can be availed by registered institutions, individuals or an association of producers.
The interest rates for the agricultural short term loan is 12% p.a. if the amount availed is Rs 3 lakh or below and is 13% p.a. if the amount availed is above Rs 3 Lakh. The agricultural term loans charge an interest rate of 13% p.a. regardless of the amount taken.
The rural marketing outlet loan provides a maximum loan amount of up to 25 Lakhs with a margin of 25% of the project outlay. The repayment tenures vary from 3 years to 10 years and has an initial moratorium period ranging from 12 months to 18 months.
The loans for purchase of agricultural land has a margin which is minimum 20% of the project cost. This loan requires the borrower to put the land purchased down as security. When the purchased land is mortgaged in favour of the bank, it acts as security. Along with mortgaging the purchased land, collateral security such as land property whose value is equal to that of the loan amount is also accepted. Borrowers can also pledge an LIC policy r a national savings scheme policy whose surrender value is equal to the value of the loan amount
The repayment period for this loan ranges from 7 to 10 years with instalments being yearly or half yearly and has a maximum moratorium period not exceeding 24 months.