UNIVERSITY OF MUMBAI’S

GARWARE INSTITUTE OF CAREER EDUCATION

AND
DEVELOPMENT

AGRICULTURAL FINANCE AND

MICRO-FINANACE

Submitted By,

Mr. Rajesh Suresh Rozatkar

Roll no: 96.
Mr. Swapnil Kaluram Hadke.
Roll no: 46.
PGDABM, 2009-11.
 CERTIFICATE

TO WHOMSOEVER IT MAY CONCERN

This is to certify that Mr.Swapnil Kaluram Hadke, student of

Garware Institute Of Career Education and Development undergoing
Post Graduation Diploma in Agri-Business Management, has
completed 8 weeks training with our bank from 1 June 2010 to 31
July 2010 during which time he was placed at our Narayangaon
Branch, Pune in Agriculture Finance Department
The conduct and responsiveness of Mr.Swapnil Kaluram
Hadke during the training period has been to be excellent.
He has submitted his project report on the subject
“Agriculture Finance and Microfinance”
This certificate issued without any commitment on the part
of the Bank for future employment of whatsoever nature.

Th
 ACKNOWLEDGEMENT
In the process of preparing my chosen project on “Study of
Agriculture finance and Microfinance Bank of India” I approach to Bank of India
Regional office which located at Shivajinagar, Pune. I sincerely express my
gratitude to MR. Pandit Rao. (H.R.Manager, Bank of India) who kindly accepted
and permitted me to undertake the project “Study of Agriculture finance and
Microfinance Bank of India”
I am truly indebted to Mr.Uttam Vajpayee (Chief Manager Bank of
India, Narayangaon) and Mr. Shirish Upadhay (Senior Manager Bank Of India,
Narayangaon)who personally took pains in providing all necessary documents
related to Agriculture Financing played the role of a mentor by explaining to me
different concept of agriculture financing regulatory requirement legal
requirement various agriculture schemes. I am also thankful to Mr. Rahul Bhujbal
(Agriculture Officer Bank of India, Narayangaon) who assets me understand
various process and various salient future of Agriculture credit. I am also thankful
to Mr. Ulhas Hase (Credit Manager Bank of India, Narayangaon) who concerned
for their valuable guidance and support which has helped me a lot towards the
completion of project.
I would like to thanks Mr. Arun Kshirsagar (Director, GICED), for
providing necessary help during the course this summer project. It is pleasure to
acknowledge my sincere thanks to Mr. Shirish. S.Patil (Course coordinator) and
Shri.Ashok Gowande (Project Guide) for their encouragement and guidance
throughout the project. Indeed words fail to express my profound sense of
gratitude and heartfelt indebtedness to my beloved parents and friends.
I am also thankful to all of them who are directly or indirectly
involved in driving this project to a success.
Date:
Place: Swapnil Kaluram Hadke.
 INDEX
SR. NO CONTENT PAGE NO

1) Appendex-I Bank Profile - Reason to chosen Summer 4

internship Program in Union bank of India.
2) Appendex-II Objective- study and Research 7
methodology.
3) Chapter -I Introduction to agriculture finance. - 10
1.1.Definition scope and importance
1.2.Concept and over view in agriculture
1.3. Challenge and outlook to agriculture.
4) Chapter-II Source of finance- classification of the credits . 14

5) Chapter -III Agriculture finance- Advances Direct Indirect 18

finance
6) Chapter-IV Agriculture finance-various step in loan 27

disbursement.
7) Chapter-V Branch profile- Union bank of India Manchar 34

branch.
8) Chapter-VI Agriculture Finance-Salient Feature’s of 38

Various scheme’s for loan disbarment.

9) Chapter-VII Suggestions and Recommendations 50

10) Conclusion 53
11) Bibliography. and Abbreviations 54
 Chapter 1

1.1 EXECUTIVE SUMMARY.

Project Title:-
STUDY OF AGRICULTURE FINANCE AND MICRO-FINANCE.

WHY THE PROJECT IS?:-

1) Determine the share of agriculture finance in total finance.
2) Understand the various types of financing in agriculture.
3) Understand the method of financing in each type.
4) Understand the meaning of microfinance.
5) Understand how banks are linked to SHGs.
6) Study functioning of SHGs.
7) Determine problems of SHGs.

Objectives:-
1) To study various types of loans.
2) To study various types of credit available for agriculture in
BANK OF INDIA.
3) To study bank contribution in microfinance.
4) Determine the problems of SHGs.

MATERIALS AND METHODOLOGY:-

1) Sources of data:-
Primary data:- Bank of Maharashtra, lead bank Pune.
Secondary Data:- Annual Report of Bank of India,
Narayangaon branch.
 Chapter 2

1.2 INTRODUCTION

AGRICULTURE FINANCE

Agriculture finance means “any of several credits used to finance

agricultural transactions, including loans, notes, bills of exchange. These types of
financing are adapted to the specific financial needs of farmers in the form of
short term, medium term, and long term loans.”

Finance in agriculture is as important as development of technologies.

Technical inputs can be purchased and used by farmer only if he has money
(funds). But his own money is always inadequate and he needs outside finance or
credit.
Professional money lenders were the only source of credit to
agriculture till 1935. They use to charge unduly high rates of interest and follow
serious practices while giving loans and recovering them. As a result, farmers
were heavily burdened with debts and many of them
perpetuated debts. There were widespread discontents among farmers against
these practices and there were instances of riots also.

With the passing of Reserve Bank of India Act 1934, District Central Co-
op. Banks Act and Land Development Banks Act, agricultural credit received
impetus and there were improvements in agricultural credit. A powerful
alternative agency came into being.

Credit is also needed by the agencies for supply of inputs and

services to the agriculturist and for the developments of storage and
marketing facilities for the agricultural produce.

Objective of study
 Today, India ranks second worldwide in farm output. Agriculture and
allied sectors like forestry and logging accounted for 16.6% of the GDP in 2007,
employed 52% of the total work force and despite a steady decline of its share in
the GDP, is still the largest economic sector and plays a significant role in the
overall socio-economic development of India.

India is the largest producer in the world of milk, cashew nuts,

coconuts, tea, ginger, turmeric and black pepper. It also has the world's largest
cattle population (281 million). It is the second largest producer of wheat, rice,
sugar, groundnut and inland fish. It is the third largest producer of tobacco. India
accounts for 10% of the world fruit production with first rank in the production of
banana and sapota.

The main sources of farmers to get the financial assistance are co-
operative and commercial banks, institutions, Agriculturist money lenders,
relatives etc., but bank is safe and convenient source of borrowing money for
farmers. And for banks also agriculture lending is very safe and profitable in
nature. For targeting the huge potential of the agriculture sector bank should be
properly estimating the credit need of agriculture sector and prepares the credit
plan for lending in well in advance. In recent time technology play an important
role in various field. There for agriculture sector not escape from it moreover in
India Population increases day by day and main challenge to scientist and farmers
is to fulfill food requirement. Also give to knowledge of latest cropping pattern
new variety to the farmers.

Here are the Highlights of Union Budget 2010:

 Vision & Objective:

 GDP Growth to be targeted at 9%

 Target of Rs 25,000 cr disinvestment this year
 Direct Tax Code and GST will be implemented from April 1, 2011
 Fertilizer Subsidy to be reduced
 GDP to reach 10% in near future
 To consider Parikh Report on Fuel Price
 FDI Regime to be simplified
 Inflation Rate to be lowered in 2 Months
 2% interest subvention for Exports extended for one year
  Committed to SEZ Growth

 Banking:

 More Private Banks to be encouraged

 Additional Banking License to Private Players

 FY10 Capital for PSU Banks stand at Rs 16,500 crore
 Rs 1,200 crore to be allocated to PSU Banks
 Rural Banks to be supported
 Banks to get Rs 6,000 crore to improve fundamental structure
 Banks for all villages with a population of 2,000

 Agriculture:

 Four-pronged agricultural strategy to be adopted

 More help to Food Processing Sector
 Rs 400 crore to be allocated for Green Revolution in Eastern India
 Rs 300 crore for Rashtriya Krishi Vikash Yojna
 Extend Loan Repayment for drohught-hit Farmers
 Farmers, who repay loan on time, will get a waiver of 2%
 Farmers to get Loans at 5%
 To extend farm loan repayment by 6 months
 Agriculture Loan for Farmers increased to Rs 3,75,000 crore
 New Food Policy from April 1, 2010

Rs 300 crore to be allocated for Pulse Production

SCOPE AND IMPORTANCE

 Agriculture production in the country depends upon millions of small
farmers. Intensity of their effort and the efficiency of their effort and efficiency of
the technique that will help in raising the yield per acre. Because of inadequate
financial resources and absence of timely credit facilities at reasonable rates,
many of the farmers, even though otherwise willing, are unable to go in for
improved seeds and manures or to introduce better methods or techniques.
Works on minor irrigation like wells owned by the cultivators either get into
disuse or are not fully utilized due to want of capital.

The major object is to develop local resource of seeds, manures and

irrigation and to provide other accessories of production. To utilized man power
and cattle resources more fully than it is as present. These aids to better and
more intensive farming are essential. It is therefore of the almost important that
the financial requirements of the procedures for this purposes should be
adequately met.

The achievement of target in the agricultural sector which cover the

production of food and essential raw material like cotton, jute, and oil seeds.
Provision of sufficient and timely credit at fab-rate of interest should be available.
Assistance rendered by way of credit has, however, to be related to specific items
of productive work or of essential cost of cultivation.

For providing this facilities all the existing agencies e.g. money lender,
commercial banks, co-operatives and the state have to be integrated and
harnessed to a common purpose. Such a comprehensive approach is essential for
ensuring the best use of all the available resources of the nation.
 Chapter 3

Profile

3.1 Bank of India

Bank of India was founded on September 7, 1906. In July 1969 Bank of
India was nationalized along with 13 other banks.
In business volume, Bank of India occupies a premier position among the
nationalized banks.
Presently, Bank of India has 3021 branches in India as on 31 march 2009
spread over all states including 136 specialized branches. These branches are
controlled through 48 Zonal Offices.
The total number of shares holders as on 31 march 2009 is 235589 and
total number of shares was 525175300

Our emblem

The bank of India emblem epitomizes the corporate personality

and basic policy of Bank of India. Within the central circle lies the
bank’s seal a symbolic and stylized representation of Mother of
India. The five prongs of the star represent the bank pragmatic
aspect banking services extending over five continents. The single elongated
point, yearning upward, conveys Bank of India’s unceasing endeavor to achieve
ever ascending goals.

Our mission

To provide superior, pro-active banking service to niche markets

globally, while providing cost effective, responsive service to other in our role as a
development bank, and in so doing meet the requirement of our stakeholders.
 3.2 FINANCIAL STATUS OF BANK OF INDIA

1) Business Mixtures – Rs. 342831 crores.

2) Net profit – Rs. 562 Crores to 584 Crores.

3) Operating profit – Rs. 1094 Crores

4) Net Interest income – Rs. 1301 Crores.

5) Net Interest margin – Rs. 2.42%

6) Non Interest income – Rs. 566 crores to Rs. 646 crores.

7) Gross NPA ratio – 1.89%

8) Cost to income ratio – 43.82 %

9) Total deposit - Rs. 1,95,021 crores.

10) Total advances – Rs. 1,47,809 crores.

11) Net worth of the bank – Rs. 11728 crores

 3.3 TARGET FOR AGRICULTURAL FINANCE

1) The scheduled commercial bank are expected to enlarge credit to

priority sector and ensure that priority sector advances constitute 40%
of net bank credit and that a substantial portion is directed to weaker
sections.

2) Within the overall main lending target of 40% of the net bank credit, it
should be ensured that,
a) 18% of net bank credit goes to agriculture sector.
b) 10% of net bank credit is given to weaker section.
c) 1% of previous year’s total advances is given under the
differential rate of interest scheme.

3) Taking into consideration the fact that ultimate objective of

agricultural credit of whether ‘direct’ or ‘indirect’ is to help the
agricultural production, the lending under the ‘direct’ and ‘indirect’
categories of agricultural advances will be clubbed for the purpose of
competing performance of bank vice-versa the sub target of 18%.

4) Advances under the ‘Indirect ’category in excess of 4.5% of the net

bank credit would not be reckoned in computing performance under
the sub target of 18%. However all agricultural advances under the
categories ‘direct’ and ‘indirect’ will be reckoned in computing
performance under the overall priority sector target of 40% of the net
bank credit.

5) Domestic scheduled commercial banks having shortfall including to

priority sector are allocated accounts for contribution to the rural
Infrastructure Development Fund (RIDF) established with NABARD every
year.
 Agriculture finance in Pune Districts.
There are 741 commercial and cooperative bank branches in Pune
districts out of which 481 are commercial and 260 are cooperative banks. Pune
Districts Central Co-op. bank branches are 236. Under this service area
approaches 407 branches of commercial and co-op. bank branches are
participating in covering 1866 villages in 13 blocks in districts. Pimpri-Chinchawad
municipal co-op. area is outside the purview of service area approach and also 42
urban co-op branches are operating in Pune districts.

According to lead bank the total crop finance in the districts in

this financial year 2009-10 will be around 950 crore. In pune Districts,
the pune districts central co-op. bank is leading amongst all banks and
has offered 650 crores for this year, and national bank will offer 300
crores. As compared with last year the agricultural finance has
increased by 200 crores, Means from 750 to 950 crores.

The farmers who are repaying the loan in time, will get loan
this year by 4% of interest rate last year 64,699 farmer borrowed crop
loan, this amount expected to rise this year. Last year approximately
50% of crop loan amount was distributed on sugar cane crop alone.
 Agriculture finance- various steps in loan disbursement
The financing bank is vested with the powers either to accept or
reject the farmer’s loan proposal. This is an equal to an objective appraisal of
from credit proposal and procedure and formalities followed in the processing of
loan. Following is the standard processing procedure explained.

1) Interview with farmers:- The bankers studies farmers-borrowers in

the interview regarding his credit characteristics such as honesty integrity,
frankness, progressive thinking, indebtedness, repayment capacity etc. The
banker explains to the farmers the terms and condition under which loan is going
to be sanctioned. Interview helps the bankers to understand the genuine need of
farmers.
2) Submission of loan application by the farmers:- After getting satisfied
with the credentials of the farmers, a banker gives the loan application form to
him. Details regarding location of farm, purpose of loan, cost of the scheme,
credit requirement, farm budget, financial statements etc. as required in form are
filled by the farmers. Certificate such as 7/12 extracts, farm map, NOC, affidavit
by farmers, hypothecation deed, D/P note, passport size photo is affixed to the
loan application.

3) Scrutiny of records:- The ownership and extent of land as indicated in

the relevant certificates are verified by the bank officials with village revenue
office. Banker also appoints its advocates for finding out authenticity of
information.

4) Visit to the farmer’s field before sanction of loan:- After verifying

record, the field officer of the bank pays a visit to the farm to verify the particulars
given by the Famers. A pre-sanction visit is expected to help the banker to identify
the farmers, the guarantor, locate the boundaries of land as per the map and
asses the managerial capacity of the farmers in farming and allied enterprises and
the farmer’s attitude towards best technology. In this visit officer thoroughly
scrutinize the proposal and submit report regarding feasibility of proposal which
helps banker to sanction or reject the loan.

5) Criteria for Loan Eligibility:- The following aspects are considered in

judging the eligibility of borrower to receive the loan.

1) He should have sound character and financial integrity.

2) His dealing with friends, neighbors, financial institution, etc.

must be proper.

3) He must have progressive outlook and be respective to

modern technology.

4) He should sincerely implement the proposed scheme and

ensure proper use of credit.
 5) The security provided by the farmers must be free from any
legislation.

6) Sanction of Loan:- After examine the all aspects presented in pre-

sanction farm inspection report, the branch manager takes decision as, to
whether to sanction the loan or not. Before sanctioning the loan the bank
manager considers the technical feasibility, economic viability, and bankability of
propose project including the repayment capacity, risks bearing ability and
sureties offered by borrower. If the loan amount is beyond the sanctioning power
of branch manager, it is forwarded to regional manager or zonal manger,
incorporating his recommendation. The authorities at the respective offices take
the final decision on the proposed projects.

7) Submission of Requisites Documents:- Before sanctioning the

stipulated amount to the borrower, the following documents are obtained by the
banking institution.

a) Demand Promissory Note.

b) Hypothecation deed.

c) Guarantee letter.

d) Installment letter.

e) Authorization letter regarding payment of Loan.

f) Mortgage deed.

Title deeds are examines by the legal officer of the bank and his opinion with the
regard to clear, marketable and unmitigated title is sought.

8) Disbursement of Loan:- As soon as the execution of the document is

completed, the loan amount is credited to the borrower’s account. The loan
amount is disbursed in phased manner, that too after ensuring that the loan is
used by the borrower properly. A realistic payment plan is framed and given to
the farmers keeping in view the income flow of the proposed project. Generally
bank makes disbursement to the supplier, in order to insure that the proceeds of
the term loan are not diverted for unauthorized proposed.

9) Post credit follow up measures:- The bank manager or Agriculture

officer pays a visit to the farmers to ascertain the proper use of credit. This also
benefits the farmers, for they can get technical advice if any needed from the
agriculture advice in the implementation of the scheme. These visit are also
meant for the development for developing a close report between the farmers
and banker.

10) Recovery of Loan:- The bank reminds the borrower in advances about
the repayment of loan in time. If needed recovery camps, special drives, village
meeting etc. are organized at an appropriate time. All appropriate measures are
taken to persuade the borrower to repay the loan in time. In the case of default,
the reason for the same are ascertained to find out whether the borrowers is a
deliberate defaulter or not. If the reason is genuine, the borrower is further
helped by extending finance accelerate farm production. In this way procedural
formalities in sanction of farm loan takes place.
LEAD BANK:

Bank of Maharashtra is a lead bank in Pune District. Lead bank is one

which is selected amongst all banks in districts and is work as a lead to all bank in
district.

Lead bank prepares various plans for all banks about growth of total
priority advances including agriculture. It also works as monitoring organization to
achieve those plans.

Following is Total Priority advances plans and its achievement

(including agriculture) prepared by Lead Bank.

(amt.in Lacks.)

Year Ended Target Achieved

31/03/2007 52593 60573
31/03/2008 73870 78846
31/12/2009 139151 153107

Following is Agriculture Advances plans and its achievements.

(amt.in Lacks.)

Year Ended Agriculture Allied Activity.

Target Achieved Target Achieved
31/03/2007 35564 40155 5055 6520
31/03/2008 51213 52864 7472 7884
31/12/2009 59113 69025 9410 8762

Agriculture:- It includes crop, pipeline, Tractor etc.

Allied activity:- It includes dairy projects, Poultry project, etc.

Following is total priority advances plans and its achievements (including

agriculture.)
For Junner Taluka.
(Amt. in lacks.)
Year ended Target Achieved
31/03/2009 72.39 69.08
31/12/2009 76.54 74.55

DLTC :- Districts Level Technical Committee

 This committee prepares a scale of finance for every crop in district.
This scale is circulated to every bank branches in district and branch has to
sanction the loan limit according to this scale. This committee has members from
nationalized banks and other banks in district with authorities of govt. Agriculture
department.

SCALE OF FINANCE FOR VARIOUS CROPS IN PUNE DISTRICT FOR

2009-2010

PUNE DISTRICT CENTRAL CO-OP. BANK, PUNE

2009-2010 CROP LOAN SCALE.

Sr.No. Name of Crop Scale Of Finance (Rs.)

1 SUGARCANE Per ha. Per acre.
a) Aadsali 62500 25000
b) Pre-Seasonal 55000 22000
c) Suru 55000 22000
d) Ratoon 50000 20000
TISSUECULTURE SUGARCANE SETS
a) Aadsali 65000 26000
b) Suru 60000 24000
GRAPES
a) Simple/ Winery members 160000 64000
b) Exporter members 220000 88000
BANANA
a) Banana 55000 22000
b) Tissue culture banana 80000 32000
ALUVERA 24000 9600
SWEETCORN MAIZE 15000 6000

TOMATO
a) Tomato Hybrid 45000 18000
 POTATO
a) Kharif potato 40000 16000
b) certified seeds 62500 25000
COTTON
a) Rainfed Hybrid 15000 6000
b) Irrigated Hybrid 15000 6000
JAWARI
a) Hybrid 15000 6000
b) rainfed 8000 3200
BAJARA
a) Hybrid 11250 4500
b) Rainfed 10000 4000
PADDY
a) Simple variety 7500 3000
b) certified variety 22500 9000
(Ambemohar, Indrayani, Pawana)
c) Basmati 22500 9000
d) Hybrid Rice 22500 9000
MAIZE HYBRID – IRRIGATED 17500 7000
OIL SEEDS
a) Sesamum 7500 3000
b) Sunflower 15000 6000
c) Ground Nut 20000 8000
d) Castor 5000 2000
HORTICULTURAL CROPS
a) Lemon 20000 8000
b) Orange 27500 11000
c) Guava 25000 11000
d) Ber 20000 8000
e) Cashew Nut 20000 8000
f) Coconut 25000 10000
g) Alphanso 45000 18000
LEAFY VEGETABLES 10000 4000

SHORT TERM LOAN FOR GREENHOUSE PLANTATION (5 GUNTHA AREA)

 Sr.no. Crop Amount
1 GERBERA 90000 36000
2 CARNESIUM 137000 54800
3 STROWBERY 45000 18000
4 CHERI TOMATO 35000 14000
5 ROSE 50000 20000
6 SIMLA CAPSIUM 40000 16000
BUSINESS OF OUR BANK OVER THE YEAR:-
Amt.(Rs. In Crores)
Year Deposit Advances Interes Other Total Int. Operating Total Profit
s t income income expende expenses expendi
earned d ture
2007 119881.7 86791 7096.51 566.42 7662.93 2367.55 1134.6 3502.15 1123.17
2008 150012 113476.3 12482.32 645.89 13128.21 3077.12 885.99 3963.11 2009.4
2009 189708.5 142909.4 15719.99 951.86 16671.85 10848.45 5031.38 15879.83 3007.35

Title:- Deposits and Advances

Amt. in Crores
Graph1.1

Deposits and Advances

Deposits Advances

189708.48

150011.98
142909.37

119881.74
113476.33

86791

2007 2008 2009

With the above graph 1.1 and figures in the table it is clear that deposits
and advances are growing rapidly, which shows the growth in the overall business
of the Bank of India, and also its justify that deposits and advances are in
increasing manner.
Title:- Total income.
Amt. in crores

Graph 1.2

Total Income
Interest Earned Other Income Total Income

16671.85
15719.99

13128.21
12482.32

7662.93
7096.51

566.42 645.89 951.86

2007 2008 2009

The total income is sum of two important earnings; one is interest earned
on advances disbursed and second is the other income of bank. With the above
graph 1.2 and figures above the graph it has been seen that interest earned and
other income both are constantly growing per year.
Title:- Profit
Amt. in Crores
Graph 1.3

Profit
Profit

3007.35

2009.4

1123.17

2007 2008 2009

The profit graph 1.3 shows that there was growth in profit in year
2007,2008 and 2009 gradually increases. Profit of the Bank constantly increases
shown by the graph.

Comments:-
 The reason of continuous increase in the profit is due to continuous
increases in the advances and interest earned on the
advances. The growth of advances in year 2oo7,08 & 09 was grow
8.52%, 9.34% & 9.78% . And also increases in the investment rate
In year 07,08 & 09 was 6.59% ,6.83% & 7.14% only.
 All the growth rate shown in above graph 1.1 ,1.2 & 1.3 .

g
Title:- Total Expenditure
Amt. in Crores
Graph-1.4

Total Expenditure
In.Expended opt. Expences Total Expaences
15879.83

10848.45

5031.38
3502.15 3963.11
3077.12
2367.55
1134.6 885.99

2007 2008 2009

The total Expenditure graph 1.4 shows that rise in the expenditure of the
Bank. In last year highly increases in the expenditure in order to previous years
which is shown in the graph.
 Balance sheet of Narayangaon Branch:
Sr.No. Capital & 31 March 2007 31 March 2008 31 March 2009
liabilities
1 Capital
2 Reserves &
Surplus
3 Deposits 40,11,98,376.54 43,31,30,284.04 45,72,36,919.84

4 Borrowing

5 Other Liabilities 4540674.36 43,13,246.80 87,44,00,457.75

6 Total 40,57,39,050.90 43,74,43,530.84 1,33,16,37,377.57

7 Assets Cash 84,32,246.41 2,04,64,343.16 73,76,359.50

Balance with
RBI
8 Balance with
Bank & Money
at call & short
notice
9 Investment

10 Advances 36,32,50,318.26 26,74,89,143.61 30,32,88,716.84

11 Fixed Assets 5,33,841.56 5,84,957.80 13,21,221.29

12 Other Assets 3,35,22,644.67 14,89,05,086.27 1,01,96,37,079.94

13 Total 40,57,39,050.90 43,74,43,530.84 1,33,16,37,577.57

14 Contingent 24,44,800 25,56,300 8,90,600.00

liabilities
15 Bill For 29,30,974 9,11,633.00 9,36,633.00
collection
PROFIT AND LOSS ACCOUNT
Sr.No March 2007 March 2008 March 2009
.
1 INCOME
INTREST EARNED 5,94,00,789.63 6,84,64,635.96 1,75,43,719
OTHER INCOME 30,33,229.12 28,54,970.83 31,143.91
TOTAL 6,24,54,018.75 7,13,19,606.79 1,75,12,575.09

2 EXPENDITURE
INTEREST EXPENDED 3,55,56,075.32 4,23,93,487.44 1,10,27,513.52
OPERATING EXPENCES 69,95,917.54 78,48,192.37 24,14,089.34

3 PROFIT TRANSFERD 1,99,02,025.89 2,10,77,926.96 40,70,972.23

FULL

TOTAL 6,24,54,018.75 7,13,19,606.79 1,75,12,575

Types of Agriculture Finances in BOI

a) Crop Finance;
a) Short Term Lone
b) Composite cash Scheme
c) Kisan credit card
d) Finance against storage receipt
b) Land development
c) Dairy development
d) Farm machinery & Implements
e) Poultry development
f) Bio-gas plant
g) Cold storage
h) Finance to Hi-Tech Agriculture projects
i) Sericulture development
j) Sheep and goat rearing
k) Construction of Godowns
l) Plantation of Horticulture crops
m) Gold lone scheme
n) Forest development
o) Piggery development
p) Self help Groups
q) Integrated farm development
r) NABARB Refinance
 Crop Finance

Objectives
 To finance for the production of various crops with improved
Farm practices.
 Extension of crop lone within villagers
 To provides return on credit balance in customers Ac. During cash
Surplus time.

Eligibility
 Crop hypothecation deeds
 Land mortgage deeds
 Guarantors profile
 No dues certificates of all bank & societies

Quantum of finance & Margin

 Short term credit for consumption - 25%
 Finance against storage receipt - 50%
 For crop production - Nil

Security
Up to 25000 /- hypothecation of crop/ other movable
Assets.
Above 25000/- Hypothecation of crop & mortgage
Of land or collateral security.

INTEREST RATE
Up to Rs. 2 lakh - 7%
Above Rs. 2 lakh - according to bank
REPAYMENT
Maximum period 12 months

CROP INSURANCE
Crop insurance for the notified crop in the specified by the GOVE.
Declaration for that total area.
 FARM MECHANISATION, IMPLEMENTS & EQUIPMENT

Objective
To improve efficiency in farm operation and asset the farmers for
adopting improve agronomic practices by providing need
Based credit support for acquiring farm machineries

PURPOSE
For purchase of new/second hand tractor , power tiller, power, Sprayer,
power dusters, chaff cutter and transporting agricultural equipment /
implements. Finance for major renovation of new/second hand jeep, pick up, van,
truck etc.

ELIGIBILITY
 Farmers own land or registered leased land
 Productive use of that implement in that area
 Stat govt. Corporation engaged in providing hire services to the
farmers.
 Mortgage of land deeds
 Agro service centers run by technically qualified entrepreneurs may be
financed

TECHNICAL FEASIBILITY
Suitability of the machineries & equipments in that area.
Needs & capability of machineries in that particular area.

QUANTUM OF FINANCE/MARGIN:-
Upto Rs. 50,000/- NIL Margin
Above Rs. 50,000/-15% to 25% Margin
Purchase of second hand tractor unit/transport vehicles.
 Margin 33%
Finance for repair/renovation of tractor unit, transport vehicles.
Margin 25% (short term advance)

SECURITY: COMPOSITE DOCUMENTS

 Hypothecation of crop
 Land deeds or mortgage deeds.
 Guarantor letter.
 No dues certificate of all banks in that area.
 Comprehensive insurance policy.
 Registration of charges with RTA.

DISBURSEMENT:-
The loan amount directly disbursed to supplier with instruction to
supply the goods as per the offer letter.

REPAYMENT:-
New tractor Maximum 9 years
New power tiller Maximum 7 years
Second hand tractor Maximum 4 years
Other Machinery Maximum 3 to 5 years
Repairs/ Renovation Maximum 3 to 5 years
 SELF HELP GROUP
Concept:
It is the informal groups promoted by nongovernmental organization
having the potential to bring together formal banking structure and the rural poor
for mutual benefit and that mutual benefit and their working has been
encouraging.

Objectives:
 To encourage the people to do work in group
 To increase leadership qualities
 To increase the saving habit
 To increase proper utilization of money
 To increase social, educational and economical development

CHARACTERISTICS OF SHG:
 Ideal size of SHG is 10 to 20 members.
 The group needs not be registered.
 From one family, only one member.
 The group consists of either only men or only women.
 Woman groups found generally better performance.
 The members having the same social and financial background.
 The group should meet regularly.
 Compulsory attendance.

ACTIVITIES:
 To collect prescribed funds.
 Formation of group.
 To hold monthly meeting, record and maintain account of transaction.
 To operate its dealings through the bank account.

ASSESSMENT OF SHG LINKAGE:

 First it is the saving linkage and second is the credit linkage. The saving
linkages can have immediately after the group starts internal savings. Once the
group completed six month then it is eligible for bank loans. The performance of
the SHG to be assessed by the bank and on that assessment bank gives the loan to
the SHG.
FACILITY PROVIDED BY THE BANK:
 Long term loan short term loan and cash credit limit depending upon
the requirement of group.
 Bank gives loan on the basis of purpose, performance, requirement,
production consumption etc.
 Disbursement of credit to an SHG should be made in presence of their
office bearers and selected members.
 Refinance from NABARD at the rate of 100% of the lending to the SHG is
available.
REPAYMENT SCHEDULE:
It is depend upon the income generation of that SHG group. Generally
repayment schedule within 3 to 5 year on monthly or quarterly intervals.
SECURITY NORMS:
 Intense Agreement to be signed by all the members.
 No requirement of Guarantor letter or collateral securities, But if
amount above 5 lacks then only it will be require.
RATE OF INTEREST:
Below 50,000 7%
Above 50,000 10%
 LAND DEVELOPMENT

Objective:
Land degradation is the major problem in Indian agriculture .
Most of the land area in our country shows the evidence of degradation, affecting
thereby the productive resource base
In India about 175 million ha.(53%) is suffering from degradation and
7.61 million ha. Of salt affected soil in India as per the Ministry of Agriculture. Also
10.9 M ha. Land water logging affected area So there
Is requirement of land development in India.
Soil degradation takes place for various reasons like excessive use of chemical
fertilizer, uncontrolled irrigation, excess use of ground water.

PURPOSE:
 For land leveling
 For reclamation of soil
 Bundling and soil conservation measures
ELIGIBILITY:
 Farmers own land
 Farmers cultivating registered leased land
QUANTUM / MARGIN:
Quantum of loan will depend upon the estimate cost of the scheme
which is depend upon branch level

SECURITY:
 Term loan agreement
 Mortgage of land or declaration as per the Agricultural credit act
 Collateral security of adequate worth
 Guarantor’s letter

MARGIN:
 Loan up to Rs.50000/- Nil
Loan over Rs.50000/- 15% to 25%

MODE OF DESBURSEMENT:
The loan amount should be disbursed in stages depending upon the
Progress as per project report. The hire charges for the machineries &
implements should be paid directly to the executive agencies.

REPAYMENT:
Repayment within 9-15 years depending upon the loan amount.

PURCHASE OF LAND FOR AGRICULTURE PURPOSE

OBJECTIVE:-
 To make the small and marginal holdings economically viable
 To bring fallow lands and waste lands under cultivation.
 To step up the agricultural production and productivity.

ELIGIBILITY:-
Farmers having maximum 5 acres of non-irrigated land.

SECURITY:-
 Mortgage of lands deeds
 Collateral security of adequate worth
 Guarantor letter

MARGIN:-
Upto Rs.50,000 Nill
Above Rs.50,000 minimum margin 10%

VALUATION:-
For the purpose of valuation of land for fixing the quantum of finance
the price indicated by the farmer may be cross checked with the last 5 years
average registration value available with the Registrar/ Sub-Registrar of the areas
and a view taken by the bank.

REPAYMENT PERIOD:-
Loan may be repaid 7-12 years in half-yearly/ yearly installments
including a maximum moratorium period of 24 months. The moratorium period
may be fixed taking into account the gestation period of the project and cash
flow.

REPAYING CAPACITY:-
 The financing Bank should itself that the borrower/s would have
adequate income from their production activities and other income to repay the
bank loan with interest and the repayment period may be fixed accordingly.

LOCATION OF LOAD HOLDING:-

The farmers may be allowed to purchase land within the village
boundary or in a radius of 3 to 5 Kms. Now the Existing land owned by them. The
care also should be taken of the managerial aspects of such fragmented holdings.

NABARD REFINANCE:-
NABARD would provide refinance to the banks for the loans disturbed
by them for purchase of land under the scheme broadly on the same terms and
conditions as applicable to the schematic finance.

Loan for Agriclinic And Agribusiness .

OBJECTIVES:-
  To supply and efforts Government extension system
 To provide gainful employment to agricultural graduate in new emerging
area in agricultural sector.

DEFINITION:-
'Agriclinic' are envisage to provide export services and advices to
farmers on cropping practices, technology, crop protection, market trends and
health of animal etc.
'Agribusiness' is envisaged to provide input supply, farm equipments on
hire and other services.

ELIGIBILITY:-
The scheme is open to Agricultural graduates and allied to agricultural
like Horticulture, Forestry, Dairy, Animal Husbandry, Poultry etc.

SELECTION OF BORROWER:-
Selection of borrower and location of the projects could be done by the
banks in consultation with the Agricultural University and also the customer
completed training programmers.

PROJECT COST AND COVERAGE:-

 May take up the project either individually or joint.
 Outer ceiling for cost of project by individual would be Rs.10 lacs and for
group Rs.50 lacs.
 The project with outlay above Rs. 25 lacs may be submitted to NABARD
for prior sanction.

MARGIN MONEY:-
Up to Rs.5 lacs NIL
Above Rs. 5 lacs 15 to 20%

RATE OF INTEREST:-
To be decided by the RBI guidelines.

SECURITY:-
Up to Rs.5 lacs - Hypothecation of crop, land
assets, land deeds.
Above Rs. 5 lacs - Hypothecation of crop, land
 deeds, guarantor letter ,
mortgage of immovable
properties, collateral security
REPAYMENT:-
Repayment within 5 to 10 years depending upon the activities .

MODE OF REFINANCE:-
Refinance will be extends under automatic refinance facilities as well as
scheme with prior sanction depending upon the project outlay and amount of
refinance.

LOAN FOR COLD STORAGE

INTRODUCTION
 India is the largest production of fruit and second largest producer in
vegetable in the world. In spite of that due to lacking of storage facilities post
harvest losses are 25 to 30% of the production. So that there is requirement of
storage facilities in India.

STORAGE OF FOODS AND STORAGE CONDITIONS:-

Foods and other commodities preserved by storage at low temperature,
which retards the activities of microbes. The low temperature necessary for
preservation depends on the storage time required. So that short or long term
storage facilities required.

ECONOMIC SIZE OF UNIT AND LAND REQUIREMENTS:-

Cold storage can be using store either single commodities or multiple
commodities. NABARD usually encourage cold storage where 70% of the
capacities available to farmer for rental basis .considering 70:30 utilization of the
capacitate for rental and own use, a 5000 MT capacity unit is considered.

EQUIPMENTS:-
 Vapour absorption system(VAS)
 Vapour compression system(VCS)
 Refrigeration system
 Cooling system

PHYSICAL AND FINANCIAL OUTLAY:-

 Land
 Leveling, fencing, road, drainage etc.
 Civil structure including main cold storage building, rack provision,
drying shed, machinery rooms , generator room, office, security cabin
etc.
 Standby electric supply arrangement
 Water supply arrangement
 Contingency
 Miscellaneous fixed assets
ELIGIBILITY OF BORROWER:-
 Pre-advance made by borrower
 Advanced made by partner or group of individual
  Advances granted to individual for cold storage and allied purposes
granted by SCARDBs are also eligible for refinance from NABARD.

MARGIN OR QUANTUM OF FINANCE:-

Margin money about 15 to 25% of the project cost

SECURITY:-
For limit upto Rs.50000/- Hypothecation of assets, land deeds
Above Rs. 50000/- Hypothecation of assets, Mortgage of
property, Guarantor letter, land deeds etc.

RATE OF INTEREST:-
It is applicable for cold storage limits, generally it is 13% governed by
the NABARD.

REPAYMENT PERIOD:-
Repayment period is fixed upon the financial analysis of the cash flow
for each. Generally repayment period up to nine year is allowed including a grace
period of one year.

INSURANCE:-
Assets created fully insured with bank clause , if the storage structure
breakdown, the borrower would be well advised to explore obtaining machinery
breakdown policy also.

SWOT ANALYSIS
STRENGTHS:
1. One of the largest banks in India, with total business (advances plus
deposits) exceeding Rs.4,00,000 crore
2. Continuous track record of profitability since inception
3. Vast domestic branch network spread across the country
4. Wide-ranging portfolio of financial services provided through various
subsidiaries of the bank
5. Technological edge with 100%of the banks business being
computerized.
6. Technological backbone enables the Bank to undertake product
innovation and adopt a customer centric approach.
7. Strong presence in credit cards with an ISO 9000 certification for the
operations.

WEAKNESSES:
1. Sometimes reprisals of grievances of customers consume more than the
stipulated time
2. ATMs of Bank of India or their associates are not set up at all places,
which make it difficult for people in remote areas to access ATMs.
3. Since it is a government bank so they cannot take decisions on their
own.

OPPORTUNITIES:
1. Bank of India can compete with large branch networks of the public
sector banks through its multiple branch banking & CBS distribution
approach.
2. Bank of India has opportunity to large its distribution capability to
expand Its customer base, as well as focus on cross- selling products to
its existing
 3. Customer base to expand its market share in various markets & product
segments.

THREATS:
1. Bank of India faces a threat from foreign banks which have
traditionally served trade finance, fee-based services and other
short term financing products in retail liabilities.
2. Bank of India faces strong competition from private banks and
mutual funds since Indian commercial banks attract the
majority of retail bank deposits, historically the preferred retail
savings product in India.

BIBLIOGRAPHY

Websites:-
  www.bankofindia.com
 www.rbi.org.in
 www.google.com
 www.msme.gov.in
 www.sidbi.com
 www.nabard.org
 www.unionbankofindia.com
 www.sbi.com

BOOKS & PUBLICATIONS

 M.Y.Khan & P.K.Jain, Financial Management

 Bank of India manuals and circulars
 Pratiyogita Darpan