The Hindu Business Line : Loans against warehouse receipts for farmers

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Loans against warehouse receipts for farmers — Corpn Bank ties up with MCX

Our Bureau

Mr. V.K. Chopra (left), Chairman & Managing Director, Corporation Bank, and Mr Jignesh Shah, Managing Director, Multi Commodity Exchange of India Ltd, at a press conference in Mumbai on Thursday. - - Shashi Ashiwal

Mumbai , March 31

CORPORATION Bank has launched `Corp Agriculture Produce Loan' (CAPL) scheme for farmers, in association with the Multi-Commodity Exchange of India Ltd (MCX).

The scheme is aimed at mitigating the losses incurred by farmers who often resort to sale of agriculture produce immediately after harvest due to lack of holding capacity and need for ready cash.

The scheme will enable farmer to store his goods until such time he can get decent returns on his products, said Mr V.K. Chopra, Chairman and Managing Director, Corporation Bank, addressing a press conference here today.

Under the CAPL scheme, loans up to Rs 2 lakh can be availed of at 9 per cent per annum, while loans above Rs 2 lakh and up to Rs 20 lakh will be available at 9.50 per cent.

With the minimum margin of 20 per cent of the value of agriculture products, loan can be availed of against the warehouse receipts covering the agriculture produce stored in Central Warehousing Corporation (CWC), State Warehousing Corporations and warehouses having the approval of national-level multi commodity exchanges, like the MCX. Wherever possible the farmer-trader may enter into futures sale contract through authorised members or brokers of any national-level multi-commodity exchanges. In such cases, the price risk is covered by a futures contract, the rate of interest on the loan will be 25 basis points less than the stipulated rates.

Corporation Bank holds an equity stake of 4.9 per cent in MCX.

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