negotiable warehouse receipts

Priority Sector Lending (PSL) – Increase in limits for bank lending against Negotiable Warehouse Receipts (NWRs) / electronic Negotiable Warehouse Receipts (eNWRs)

Please refer to the Statement on Developmental and Regulatory Policies dated April 7, 2021, wherein Reserve Bank of India (RBI) had announced increase in loan limits for bank lending against NWRs/eNWRs.

2. In terms of paras 8.1 (vii) and 8.2 (b) of the “Master Direction on Priority Sector Lending – Targets and Classification” dated September 4, 2020, bank loans against pledge/ hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months are eligible for classification under PSL, subject to a limit up to ₹50 lakh per borrower.

3. With a view to ensure greater flow of credit to the farmers against pledge/hypothecation of agricultural produce, and to encourage use of NWR/eNWR issued by regulated warehouses as a preferred instrument for availing such finance by the farmers, it has been decided to enhance the PSL limit for loans against NWRs/eNWRs from ₹50 lakh to ₹75 lakh per borrower. The PSL limit backed by the warehouse receipts other than NWR/eNWR will continue to be ₹50 lakh per borrower.

4. Consequent to the above change, para 8.1(vii) and 8.2(b) of the Master Direction on Priority Sector Lending – Targets and Classification dated September 4, 2020 will stand modified as follows:

Para 8.1 – Farm Credit – Individual farmers

vii. Loans against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months subject to a limit up to ₹75 lakh against NWRs/eNWRs and up to ₹50 lakh against warehouse receipts other than NWRs/eNWRs.

Para 8.2 Farm Credit – Corporate farmers, Farmer Producer Organisations (FPOs)/(FPC) Companies of Individual Farmers, Partnership firms and Co-operatives of farmers engaged in Agriculture and Allied Activities

(b) Loans up to ₹75 lakh against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months against NWRs/eNWRs and up to ₹50 lakh against warehouse receipts other than NWRs/eNWRs.

Leave a comment

Filed under banking laws

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s