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Agricultural Advances Based On MCLR

Agricultural Advances based on MCLR

ANNEXURE- ‘E’

AGRICULTURAL ADVANCES

Applicable Rate of Interest from 10.07.2018 based

On MCLR of 8.50% (for 1 Year)

  • As per RBI guidelines all rupee loans sanctioned and credit limits renewed w.e.f 1st April 2016 will be priced with reference to the Marginal Cost of Funds Based Lending Rate (MCLR)
  • All rate of interest under Agriculture Loan is linked to 1 year MCLR+ Business Strategy Spread 0.30 % + Credit Risk Premium except Crop loan upto Rs. 3 lakh, irrespective of other limits, wherever interest subvention is available.
  • 1 Year MCLR w.e.f. 10th July 2018 is 8.50% p.a.
  • Aggregate limits of equal to or below Rs.10 lakh(Credit Risk Premium)
    Sr. No. Particulars 1-Year MCLR is 8.50 % p.a.
    w.e.f. 10th July 2018.
    A- i Crop loan: The applicable rate of interest will be 0% over 1 Year MCLR+ BSS 0.30% Presently 8.80% p.a. (security documents will carry this rate only). However, branches should charge interest @7% p.a. upto a limit of Rs.3 lakh till the due date of the crop loan.
         a. upto Rs.3 lakh irrespective of other limits (whenever  interest subvention is available)
    b. over Rs. 3 lakh up to 10 lakh 8.50% (1Yr. MCLR)+BSS (0.30%) +2.20% (CRP) i.e.Minimum 11.00%
    A-ii Other than Crop Loan:  
    a. Aggregate limits upto Rs.3 lakh 8.50% (1Yr. MCLR)+BSS (0.30%) +1.80% (CRP) i.e.Minimum 10.60%
    b. Aggregate limits over Rs.3 lakh and upto & inclusive of Rs.10 lakh 8.50% (1Yr. MCLR)+BSS (0.30%) +2.20% (CRP) i.e.Minimum 11.00%
  • Aggregate limits over Rs. 10 lakh (Credit Risk Premium)
    Credit Rating SL->0.10cr but below 1 cr 
    or turnover 0.50 cr and above but
    below 5 cr. 
    SL->1cr but below 5 cr 
    or turnover 5 cr and above but
    below 50 cr.
    > 5 cr    upto 10 cr. or turnover 50 cr to <150 cr. >10 cr  to upto 30cr. or turnover 150 to 300 crore > 30 cr or turnover >300 cr
    SBS 1 1.60        
    SBS 2 1.80        
    SBS 3 2.00        
    SBS 4 2.20        
    SBS 5 2.40        
    SBS 6 2.60        
    SBS 7 2.60        
    SBS 8 2.80        
    SBS 9 3.00        
    SBS 10 3.20        
    SME 1   1.60      
    SME 2   1.80      
    SME 3   2.00      
    SME 4   2.20      
    SME 5   2.40      
    SME 6   2.60      
    SME 7   2.60      
    SME 8   2.80      
    SME 9   3.00      
    SME 10   3.20      
    MS 1     1.80 1.80  
    MS 2     1.80 1.80  
    MS 3     1.90 1.90  
    MS 4     2.05 2.05  
    MS 5     2.60 2.60  
    MS 6     2.60 2.60  
    MS 7     3.00 3.00  
    MS 8     3.00 3.00  
    MS 9     3.20 3.20  
    MS 10     3.20 3.20  
    HLC1/EC1         1.80
    HLC2/EC2         1.80
    HLC3/EC3         1.90
    HLC4/EC4         2.05
    HLC5/EC5         2.60
    HLC6/EC6         2.60
    HLC7/EC7         2.80
    HLC8/EC8         3.00
    HLC9/EC9         3.20
    HLC10/EC10         3.20

Above mentioned spread are over & above MCLR+ Business Strategy Spread (BSS). While mentioning the ROI, branches must mention about the linkage with applicable MCLR (i.e., MLCR + Business Strategy Spread (BSS)+ Credit Risk Premium).

For example, if the aggregate limits of an account carrying internal rating of SBS-1 falls within the range of over Rs.10 lakh to upto & inclusive of Rs.1 core and the applicable MCLR is say ‘1 Year MCLR’, then ROI will be 1 Year MCLR i.e. 8.50% + BSS of 0.30% + Credit Risk Premium of 1.60 %, presently 10.40 % p.a.

The final rate of interest applicable to all new advance accounts sanctioned and all credit limits renewed on or after 07.01.2017 shall be as under:-

Rate of Interest = 1 Year MCLR + Business Strategy Spread (BSS) + Credit Risk Premium *

* No other component to be added over & above these three components.

Exempted categories of rating under Priority Sector – Agriculture

There are certain agricultural activities, which are exempted from credit rating. The details/ list of such categories are furnished in Branch Cir. No.104/96 dated 16.11.2010 (Annexure-IV). In such cases, where the limit is Rs.10 lakh and above, the branches should charge interest as if advance has secured entry level credit rating such as SBS-5/ SME5/MS-5.

  • Loan against WHR

    In case of loan up to Rs.50 lakh against pledge/hypothecation of agriculture produce (including warehouse receipts) to farmers for a period not exceeding 12 months, irrespective of whether the farmers were given crop loan for raising the produce or not, interest will be charged as under:

    Quantum of FinanceRate of Interest
    • Up to Rs. 3 Lakh
    • Over Rs. 3 lakh & up to Rs.10 lakh
    • Over Rs. 10 lakh & upto Rs.50 lakh
    • 0.95% + BSS (0.30%) over 1 Year MCLR
    • 1.45% + BSS (0.30%) over 1 Year MCLR
    • 1.95% + BSS (0.30%) over 1 Year MCLR

Loans extended to PACS, FSS, and LAMPS

For loans extended to PACS, FSS, LAMPS interest will be charged at 1.70% + BSS (0.30%) over 1 Year MCLR presently 10.50% p.a.

With the introduction of MCLR, No Tenor Premium is further to be added over & above the applicable ROI (i.e. Applicable MCLR + BSS + Credit Risk Spread)