PNB signs deal with warehousing body for financing against e-NWR

Partnership will give farmers information about negotiable instrument meant to assist rural economy

Punjab National Bank (PNB) and Warehousing Development & Regulatory Authority (WDRA) signed on Monday an agreement to promote financing against e-NWR (Electronic Negotiable Warehousing Receipt).

The partnership will give farmers information about e-NWR, a negotiable instrument, and undertake outreach activities to improve agricultural pledge finance in India.

The Reserve Bank of India (RBI) two years ago increased the limit for loans against NWRs/eNWRs from Rs 50 lakh to Rs 75 lakh per borrower. The central bank aimed to encourage credit to farmers against receipts issued by warehouses registered and regulated by state-owned WDRA.

The e-NWR financing prevents distress sale by farmers and helps them in realising better price for their produce. It has benefits like increase in registration of warehouses as issuance of e-NWR can happen only when scientific storage norms as stipulated by WDRA are fulfilled.

The two sides signed a memorandum of understanding (MoU) in the presence of Atul Kumar Goel, managing director and chief executive officer of PNB, and T. K. Manoj Kumar, chairperson of WDRA.

PNB reported a 44.2 per cent year-on-year (YoY) decline in its standalone net profit to Rs 628.9 crore in the October-December quarter (Q3) as provisions for non-performing assets (NPA) went up 7 per cent YoY to Rs 3,908 crore and employees cost under operating expenses rose 34.7 per cent YoY to Rs 4,460 crore.

The State Bank of India (SBI) in January signed a MoU with WDRA to support financing against e-NWR.