DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : G.Rajeswari
Designation : Senior Lecturer
Branch : Commercial and Computer Practice
Institute : Government Polytechnic, Srikakulam
Year/Semester : V semester.
Subject : Banking - I
Subject code : CCP 504(B)
Topic : Banking, types of banks
Duration : 50mts
Sub topic : Agricultural Banks
Teaching Aids : PPT, Animation

CCP-504 (B). 7 1
Objectives:-

On completion of this period, you would be

able to Understand :

 the meaning of Agricultural Banks.

 Know the salient features of Agricultural Banks.

 the functions of Agricultural Banks.

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 Recap

In the last class We have discussed

 The Agency services of Commercial Banks.
 General utility services of Commercial Banks.

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 Questions

 What is an Agricultural Bank? Have you heard this

name?

 Is it different from ordinary Commercial Banks?

 Do these banks collect deposits and lend loans to

ordinary public?

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Meaning of Agricultural Banks

The bank which extends loans to farmers

to buy seeds, fertilizers, plough and other
inputs for cultivation is called Agricultural
Banks.

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FEATURES OF AGRICULTURAL
BANKS:-

Agricultural Banks provide loans to farmers, rural

people etc.

 Agriculture also requires short term and long

term capital.

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FEATURES OF AGRICULTURAL BANKS (contd..)

 Short term capital is required to purchase

seeds, manures, agricultural inputs etc.
 These needs will be met by Co-operative
Banks.
 In India Primary credit societies at the
village level perform this function.

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 FEATURES OF AGRICULTURAL BANKS:-

 These banks receive share capital, entrance fee

and deposits.

 These banks/societies give short period loans.

 They charge low rate of interest.

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FEATURES OF AGRICULTURAL BANKS:-

 Land development Banks grant long term loans

to farmers.
 These loans are issued on the security of the
land.
 Long term loans are given for purchase of land,
tractors, other equipment, land improvement,
digging bore wells etc.
 These loans can be repaid in installments.

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 Functions of Agricultural Banks

 Agricultural Banks mainly cater to the needs to rural

people.
 They specialise in rural credit.
 They give short term crop loans.
 These Banks provide Kissan Credit Cards to farmers
 These banks also provide loans for allied activities
such as dairying, poultry farming, piggery, bee-
keeping, fisheries etc.

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Summary

 Agricultural banks locate in rural areas.

 The main objective is to meet the credit needs of
rural people.
 At the village level, short term loans are given by
primary co-operative societies.

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Summary
 Short term loans are issued for the purpose of
buying seeds, agricultural inputs etc.

 Long term loans for agriculture is issued by land

development banks.

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 Summary
 Long term loans are needed for purchase of land,
equipment, digging bore wells etc.
 Interest rates are very low.
 These banks also give loans for allied activities like
bee-keeping, piggery, poultry farming etc.
 These Banks provide Kissan Credit Cards.

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Quiz

1. Banks established to provide long term

finance to agriculture?

A. Land development Banks

B. Public Sector Banks
C. Government
D. None

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Quiz
 Kissan Credit Cards are issued by

A. Foreign Banks
B. IDBI
C. Agricultural Banks
D. None

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Quiz
1. Short term Loans are given for which of the
following Purposes

 To purchase seeds
 Buying a Scooter
 Repairing to Scooter
 None

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Frequently Asked Questions

1. What is an Agricultural Bank?

3. What are the features of Agricultural Bank?

5. What are the functions of Agricultural Bank?

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