DEPARTMENT OF STORAGE & MARKETING

GUJARAT REGIONAL OFFICE

AHMEDABAD

NABARD WAREHOUSING SCHEME

• Financing for warehousing, storage and marketing infrastructure – accorded top priority

• Emerging, high value business

• Expected business – 50,000 cr in the next five years

• Warehouse Infrastructure Fund (WIF) created with Rs. 5000 cr – with the approval of GoI and RBI

• NABARD Warehousing Scheme 2013-14 (NWS) formulated for utilization of WIF

• NWS was approved by the Board of Directors (BoD) of NABARD in its meeting on 23 September 2013

Salient features• Eligible institutions

– State Governments & Agencies Owned/ Sponsored by State Govts. Panchayati Raj Institutions - by way of loans through respective State Governments (on the lines of RIDF).

– Agencies owned/sponsored by Government of India, Cooperatives & Cooperative Federations including Milk marketing federations, Federations of Farmers’ Collectives, APMCs, State Level Boards, Apex Marketing Boards/Bodies, SPVs set up under PPP mode, involving Farmers’ Producers’ Organisations (FPOs) and individual entrepreneurs, corporates/ companies, etc., by way of direct loans

Salient features - contd

• Activities covered– projects involving creation of storage infrastructure for

agricultural and allied produce including construction of – Warehouses, Silos, Cold storage/other cold chain

activities like Controlled Atmosphere(CA) storage, reefer vans, bulk coolers, individually quick frozen units, chilling/freezing infrastructure, etc.

– Modernization/improvement of the existing storage infrastructure projects will be considered if it leads to scientific/additional storage

– Projects to conform to norms of WDRA + should also give an undertaking for obtaining accreditation /registration from WDRA on completion of the infrastructure.

Procedure for sanction of loans• Head Office - MoS

– Upto Rs. 100 crore - Business Proposals Sanctioning Committee (BPSC) of NABARD

– Above Rs. 100 crore - Top Management Committee (TMC) of NABARD.

– (The BPSC will first consider the proposal involving sanctions in excess of Rs. 100 crore and recommend the same for consideration of the Top Management Committee)

– CGM/OIC of the ROs concerned, where projects are being implemented if required will be a special invitee to the committee for sanction of loans to private sectors.

– Delegation to ROs, in due course

– Time limit prescribed for disposal – 30 days

Project Cost

• The eligible project outlay include – cost of site development, construction of

main and ancillary structures, internal roads, drainage, machinery & equipment, etc.

– No loan would be provided for purchase of land.

– However, cost of land, not exceeding 10% of the project cost, may be reckoned towards borrower’s contribution

Terms of lendingType of borrower Max

quantum of loan

Tenure of loan

Rate of interest

State/Central Govt. owned/Assisted Entities/ Cooperatives, Federations of Coops., Federations of Farmers’ Collectives/SPVs set up under PPP mode, etc., without mandate

Primary Agricultural Cooperative Societies (PACS)/Coop. Marketing Societies (CMS) or similar institutions

95% of TFO

07 PLR + Risk premium

More than 7 years

PLR + Risk premium + Tenor premium*

Private companies / Entrepreneurs 75 % of TFO

07 years PLR + Risk premium

More than 7 years

PLR + Risk premium + Tenor premium*

*Tenor premium:Upto 7 yrs : nil ; Upto 8 yrs : 0.25%; 8 to 10 yrs : 0.30%; > 10 yrs: 0.50%

Terms of lending - contd• Security – Loans will be secured by both primary and

Collateral security• All receivables should be routed through escrow account• An evaluation fee of 0.5% of project cost (max Rs. 10

lakh) for private sector• Adequate and comprehensive insurance• Repayment – Grace period of max 2 yrs, during which,

interest has to be serviced• Interest payable on quarterly rests• Prudential norms and exposure norms will apply • Monitoring as per Credit Monitoring Manual• Due diligence including analysing through CIBIL reports,

mortgaging with central registering authority etc

Private sector applications – Rating & RoI

• Rating on a scale of 100 based on – Financials (50), Security (30), Management (10) and

Compliance (10)

Sl.No Marks obtained Rating Interest rate

1 90 and above AAA plus (prime) PLR

2 80 to 89 AAA PLR + 25 bps

3 70 to 79 AA PLR + 50 bps

4 60 to 69 A PLR + 75 bps

Aspects to be borne in mind• Large size projects, preferred• Ease of liquidity of security – determining factor

for credit decision and rating– Eg., Receivables or FD lien, preferred over land and

building

• All warehouses funded , will have to be accreditated

• No take over of existing loans• Cold storages – same guidelines • Operational guidelines including Risk rating –

are strictly for internal use – not to be shared

Action points• Letter to APMCs and District level Milk

Unions – issued by RO – to be followed up for submission of proposals

• Discuss with CCBs & PACS and facilitate submission of proposals

• Oral and personal enquiries - Apprise salient features of the scheme

• keep RO informed on a regular basis

•Thank you