Agricultural Term Loans

Loans are also available to farmers for the activities other than seasonal agricultural operations which are defined as loans with more than 18 months repayment period. These loans are termed as Term Loan or Investment Credit which are extended for upto 15 years and given for purposes such as dairy, plantation & horticulture, farm mechanisation, Minor Irrigation, Lift Irrigation schemes, land development activities, Sheep/ Goat Piggery development, Poultry development, Inland fisheries, Sericulture, Rural Godowns, Farm forestry plantations and other activities. (This list is just illustrative and not exhaustive. For details contact nearest bank branch)

The indicative unit cost for various activities is fixed by the State level Banker’s Committee (SLBC) in consultation with NABARD. At the time of actual financing the bank may fix the cost less or more than such indicative unit cost based on actual field level conditions justifying the variation.

Rate of Interest and Collateral Requirement

The rate of interest on term loans is fixed by the banks as per RBI guidelines linked to their base rate fixed by their respective Board. Further, loans are provided from a period of 3 years upto 15 years. The limit of collateral free term loan has been increased from Rs.50,000 to Rs.1,00,000. For loans above Rs. 100,000 banks obtain securities as per RBI instructions.