Banking and Insurance in Agriculture Credit Seminar [Recovered]Actual

8/3/2019 Banking and Insurance in Agriculture Credit Seminar [Recovered]Actual

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Contents

Overview

Landmarks of Banking

Agriculture Credit

Schemes

Priority Sector Lending

Policy Related to Agricultural

Landmarks of Insurance

NAIS

WBCIS

AIC

Contemporary Issues

References2


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Agriculture Banking

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Overview

Banking and Insurance share in GDP is 5.4%

Banking sector employing approx. 1.5 millionBanking sector employing approx. 1.5 million

employees.employees.

218 Scheduled Commercial Banks.

80470 branches of SCB in India, 31818 in rural.

96 RRBs working in India .

Public sector banks hold over 75 percent of totalassets of the banking industry, with the private and

foreign banks holding 18.2% and 6.5% respectively.

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Landmarks of Banking

Four distinct phases:

1. 1904-1969(predominance of co-operativesand setting up of RBI)

2. 1969-1975[ Nationalization of commercialbanks and setting up of Regional Rural Banks

(RRBs)]3. 1975-1990 (setting up of NABARD)

4. From 1991 onwards (financial sector reforms)

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Agricultural Credit Sources

Non Institutional

Money

lender

Landlord

BigBusinessman

Institutional

SCB

Public Sector

Nationalized

SBI

PrivateSector

Cooperative

State

District

Primaryagriculture

RRBs


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Credit Flow in Agriculture

62045 69560

86981125309

180486

229400254658

301908

366919375000*

475000*

050000

100000

150000

200000

250000300000

350000

400000

450000

500000

Amount(`

inc

rores)

Year *Targeted amount* Target amount7


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Credit Flow in 2010-11

Agency Target 2010-11 Achievement

as on 30 June

2010

%

Achievement

Commercial

banks

280000 66579.92 23.78

Cooperative

banks

50000 14629.93 26.60

Regional rural

banks

40000 8477.19 21.19

Total 375000 89687.04 23.928

Amount : ` In Crore


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Institutional Sources for Credit Flow

16%

9%

75%

2009-10

Cooperative RRBs Commercial

62%5%

33%

1992-93

cooperative RRB commercial

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Institutional Sources of Credit

Disbursement

2005-06 2006-07 2007-08 2008-09 2009-10

Commercial Bank 125477 166485 181088 228951 274963

RRBs 15223 20435 25312 26765 34456

Co-operative bank 30404 42480 48258 45966 57500

0

100000

200000

300000

400000

`

inc

rore

10Annual report 2009-10, NABARD


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Percentage disbursement

0

20

40

60

80

100

2004-052005-062006-072007-08 2008-09 2009-10

2522

19 1913 16

108

9 109 9

6570 72 71

78 75percentage

year

Cooperative Banks RRBs Commercial Banks

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Credit to Different Sectors

0

50000

100000

150000

200000

250000

2005-06 2006-07 2007-08 2008-09

Amount`

inc

rore

Year

Chart Title

Crop loan Term loan

12Annual report 2009-10, NABARD


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NABARD Credit disbursement

0

20000

40000

60000

80000100000

120000

140000

160000

180000

2005-062006-072007-082008-092009-10

(P)

Amount`in

crore

Year

No of scheme sanctioned

Total finance assistance

sanctioned

Disbursements

` in crore

Source : www.indiastat.com

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KCCs Issuance

Year Co-

operative

Banks

Regional

Rural

Banks

Commercial

Banks

Total

In million

2005-06 32.46% 15.60% 51.94% 8.01

2006-07 27.03% 16.56% 56.52% 8.51

2007-08 24.68% 20.90% 54.42% 8.47

2008-09 15.60% 16.41% 67.87% 8.59

2009-10 26.97% 26.97% 46.06% 5.97

Cumulative 41.66% 14.43% 43.91% 90.64

14Annual report 2009-10, NABARD KCC


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SHG Bank Linkage Program

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Total SHGs linked with banks : 69.53 lakh

Total no. of SHGs credit linked during 2009-10 : 15.87 lakh

Total no of SHGs having loans outstanding as on 31March2010

: 48.51 lakh

Estimated no of families covered upto 31 March 2010 : 97 million

Total saving amount of SHGs with banks as on 31 March

2010

: ` 6198.71 crore

Total amount of loans outstanding against SHGs as on 31

March 2010

: ` 28038.28 crore

Average loan amount outstanding per SHG as on March

2010

: ` 57795

Source :Status of Microfinance in India 2009-10 NABARD


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Loan and saving by SHGs

Savings

Total amount: ` 6198.71 crore

59%21%

20%

2009-10

commercial bank

RRBs

cooperative banks

Loan

Total amount: ` 14463.61 crore

68%

23%9%

2009-10

Commercial Bank

RRBs

Cooperative

16Source :Status of Microfinance in India 2009-10 NABARD


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Loan Wavier Scheme

Loans for agriculture & allied activities to be waived.

Impacts

3-4 crore defaulting farmers expected to avail benefit & become eligible

for fresh finance

One Time Settlement (OTS) for small and marginal farmers and consider

them eligible for fresh loans.

Redemption of past debts from non-institutional lenders.

` 71,000 crore farm loan waiver scheme, announced during 2008-09

budget, extended till June 2010 as it expired on December 31 2009.

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Policy for Agricultural Credit

Institutional credit of ` 4.75 lakh crore for the

farmers

` 10,000 crore to be contributed to NABARDs Short-

term Rural Credit fund for 2011-12.

In view of enhanced target for flow of agriculture

credit, capital base of NABARD to be strengthened by

` 3,000 crore in phased manner

Allocation for the Rashtriya Krishi Vikas Yojana is

increased to ` 7,860 crore from ` 6,755 crore in the

current fiscal.

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Policy for Agricultural Credit

Direct lending for agriculture credit to small andmarginal farmers.

Target of providing banking facilities to all 73,000

habitations having a population of over 2,000 to becompleted during 2011-2012.

Short term crop loans at 7% .

Interest subsidy of 3 per cent

Incentive of additional one per cent interest

subvention to farmers who repay short-term crop

loans as per schedule, increased to 2% for 2010-11

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Priority Sector Lending

Sector Foreign Private Public

Amount` in crore

Percentageto NBC

Amount` in crore

Percentageto NBC

Amount` in crore

Percentageto NBC

Priority Sector

Advances

50,254 39.5 6,10,450 44.7 1,64,068 42.5

Agriculture --- --- 2,49,397 18.3 58,566 17.1

Exports 28,954 22.7 --- --- ---- ---

MSE 15,489 12.2 1,51,137 11.1 46,912 13.7

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2008-09

OLIVE Sept 2010, NIAM


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Insurance

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Landmarks of Crop Insurance

LIC introduced first scheme based on individual approach in1972 for cotton in Gujarat,Continued up to 1978-79 and covered 3110 farmers

premium of 4.54 lakhs and paid claims of 37.88 lakhs.

In 1979 Pilot Crop Insurance Scheme (PCIS) was introduced.13 States implemented till 1984-85,covering 6.27 lakh farmers

Premium of 196.95 lakhs and claims of 157.05 lakhs.

From

K

harif 1985, Comprehensive Crop Insurance Scheme(CCIS) was introduced which continued till Kharif 1999.

CCIS was criticized for limited coverage of farmers, crops and risks.

For covering farmers, yield and price, Farm Income InsuranceScheme (FIIS) was also Piloted during Rabi 2003-04 and Kharif2004 seasons in selected districts 22


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CROP AND LIVESTOCK INSURANCE SCHEMES

Pilot Weather Based Crop Insurance Scheme (WBCIS) during

Rabi 2009-10 season

Livestock Insurance Scheme

National Agricultural Insurance Scheme (NAIS) / RashtriyaKrishi Bima Yojana (RKBY)

Varsha Bima / Rainfall Insurance

Sookha Suraksha Kavach (SSK) (Only for Rajasthan State)

Rainfall Insurance Scheme for Coffee Growers (RISC) WBCIS - Weather Based Crop Insurance Scheme

Wheat Insurance (Weather & Biomass)

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CROP AND LIVESTOCK INSURANCE

SCHEMES

Rabi Weather Insurance

Mango Insurance

Poppy Insurance

USBY - Uttarakhand Seb Bima Yojana (Apple Insurance) Potato Insurance

Grapes Insurance

Bio-Fuel Tree/Plant Insurance

Pulpwood Tree Insurance

Coconut Insurance

Rubber Insurance

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National Agriculture Insurance Scheme

Govt. of India and GIC introduced this scheme

from Rabi 19992000 season

Main objective is to protect the farmers against

crop failure due to natural calamities. It is presently being implemented by 25 States & 2 Union

Territories

In last 22 Crop Season:

Farmers Covered : 17.01 crore ( Av. not more than

15% farmers)Premium Collected : ` 6213.41 crore

Claims Paid : ` 20437.21 crore

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Performance of NAIS

Particulars 2007-08 2008-09 2009-10 2010-11

(Kharif only)

Claims

(` in crore)

1724 3880 4936 Under process

Farmers

Covered

(in Lakh

184 192 239 114

Farmers

Benefited

(in Lakh)

32 62 88 Under process

26www.indiastat.com


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Weather Based Crop Insurance

Insure farmers against the probability of

financial loss due to weather vagaries like

rainfall, temperature and humidity.

Scheme was introduced in 2007.

Pilot Weather Based Crop Insurance Scheme

implemented during Rabi 200910 season in

20 states. 20% premium for all crops , 50% for

Horticultural crop.

The pilot will be implemented by 27


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Performance of WBCIS

2007-08 2008-09 2009-10

Farmer

benefitted

228002 229752 1134549

Area insured

(in ha)

1068329 487336 3472629

Percentage

claim paid

100 100 89.27

28www.indiastat.com


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Major Player

Agriculture Insurance of Company India

Ltd

ICICI Lombard General Insurance

Company Ltd

United India Insurance Company Ltd

Oriental Insurance Company Ltd

IFFCO Tokio General Insurance CompanyLtd

Cholamandalam General Insurance

Company Ltd

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Agriculture Insurance Company Ltd

AIC was set up in 1st April, 2003 by the Government of

India.

It covers almost 20 million farmers, making it one of the

biggest crop insurers in the world.

AIC offers area based and weather based crop insuranceprograms in about 500 districts of India.

AIC Promoters Share HoldingsOrganization Share Holding %

General Insurance Corporation of India 35.00

National Bank for Agriculture And Rural

Development (NABARD)30.00

National Insurance Company Limited 8.75

The New India Assurance Company Limited 8.75

Oriental Insurance Company Limited 8.75

United India Insurance Company Limited 8.75

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AIC Product

AIC Present Products Mango Insurance ,Poppy Insurance, Potato Insurance,

Grapes Insurance Wheat Insurance, Coconut Insurance,Rubber Insurance, Rabi Weather Insurance, Pulpwood TreeInsurance, BioFuel Plant Insurance etc.

USBY Uttarakhand Seb Bima Yojana NAIS National Agriculture Insurance Scheme

WBCIS Weather Based Crop Insurance Scheme

RISC Rainfall Insurance Scheme for Coffee Growers

AIC Future Products

Tea insurance

Sugarcane Insurance

Basmati Rice Insurance

Contract Farming Insurance

Aromatic & Medicinal plants Insurance

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Contemporary Issues

The world bank has granted $100 million loan to Maharashtra.

NABARD disbursed ` 25,485 crore against the claims of ` 25,858 crore

under the Agricultural Debt Waiver and Debt Relief Scheme, 2008.

SCB : ` 15,681 crore

SCARDB : ` 3,513 crore

RRB : ` 6,291 crore

NABARD grants `206 crore for rural infrastructure development in West

Bengal.

J &k government is planning to introduce crop insurance scheme

Weather Based Crop Insurance cover from ICICI Lombard

In 2009-10 ICICI Lombard insured over 29 lakh farmers and over 19 lakh

acres of land.

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Source : Agricultural Today and

Economic Times


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References

www.ccsindia.org

www.india.gov.in

www.rbi.org.in

www.indg.in

www.indiastat.com

Reports Published at NABARD

Economic Times

Agriculture Today

Olive An Insight into Agri- Sector, NIAM

RRB list

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Kisan Credit Card

KCC was introduced in 1988 for short and medium term loan

Main aim was to provide timely support to farmers for their cultivationneed.

90.64 million KCCs were issued till Feb, 2010

Salient Features of KCC Scheme Farmers with production credit of 5000 Rs. Or more are eligible

Limit to be fixed on the basis of operational land holding, cropping patternand scale of finance

Card valid for 3 years subject to annual review

Each drawl to be repaid within 12 months

Security, margin, rate of interest as per RBI norms

Reschedulement of loan also permissible in case of damage to crops dueto natural calamities

Withdrawals through slips accompanied by card and pass book

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Banking and Insurance in Agriculture Credit Seminar [Recovered]Actual

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