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To improve farmers’ and agri-businesses’ access to credit, the Union finance ministry has asked banks — public, private, regional rural, and cooperative — to sign up for the National Credit Guarantee Trustee Company (NCGTC) and the e-Kisan Upaj Nidhi (e-KUN) portal.
These platforms support lending against electronic negotiable warehouse receipts (e-NWRs), which allow farmers to use stored produce as collateral for loans.
So far, eight banks have joined the NCGTC while 26 have signed up for the e-KUN portal, which is part of the Jansamarth portal.
A senior government official said the ministry had asked public-sector banks (PSBs) to ensure that their sponsored regional rural banks (RRBs) create dedicated loan policies for e-NWR financing and get on to both platforms without delay.
To spread awareness about this, banks have been advised to promote e-NWR-based loans through a local outreach and social media.
“Banks have been encouraged to promote pledge-based financing against e-NWRs through a branch-level outreach and social media campaigns,” the official added.
At the same time, banks have given suggestions to the finance ministry on executing the scheme.
“To reduce administrative burden and make the process borrower-friendly, we’ve recommended that the credit-guarantee fees be deducted and remitted in one go at the time of disbursement rather than in monthly tranches,” said a senior official in a leading PSB, citing parity with guidelines of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
Additionally, lenders have highlighted the need to expand the number of godowns and warehouses accredited to the Warehousing Development and Regulatory Authority (WDRA).
“More WDRA-accredited facilities will strengthen the ecosystem by increasing accessibility and borrower trust,” said another banker familiar with the matter.
The credit guarantee scheme for e-NWR provides coverage for both credit risk and warehouseman risk. Eligible credit facilities include loans provided by eligible lending institutions (ELIs) against e-NWRs under agricultural credit.
The Reserve Bank of India (RBI) recently increased e-NWR-backed loans under priority-sector lending from ₹75 lakh to ₹90 lakh for individual farmers, and from ₹75 lakh to ₹4 crore for farmer producer organisations, corporate farmers, and cooperatives engaged in agricultural activities.
Under the scheme, credit-guarantee coverage varies in accordance with the loan amount and category of the borrower.
For loans up to ₹3 lakh, small and marginal farmers, women, Scheduled Castes (SCs), Scheduled Tribes (STs), and farmers who are specially abled are eligible for 85 per cent guarantee coverage while for other borrowers and beneficiaries it is 75 per cent.
For loans above ₹3 lakh and up to ₹75 lakh, guarantee coverage is 80 per cent for all eligible borrowers. For loans above ₹75 lakh and up to ₹2 crore, the scheme currently does not provide coverage.
CALL FOR CHANGE
- FinMin urges all banks to join NCGTC and e-KUN portal to support loans against e-NWRs
- Only 8 banks on NCGTC and 26 on e-KUN so far
- PSBs told to push RRBs to frame e-NWR loan policies and join both platforms
- Banks advised to promote e-NWR financing via outreach and social media
- Lenders seek simpler fee remittance and more WDRA-accredited warehouses
