OPERATIONAL GUIDELINES - Agmarknet

B. Term Loan(i) Minimum 50% of the project cost (46.67% in case of NE states, hilly and tribalareas and for entrepreneurs belonging to SC/ST and their cooperatives) can beraised as term loan from the financing banks. As the subsidy is back-ended, eligibleamount of the subsidy (25%/33.33%) would initially be allowed as term loan to thebeneficiary. The repayment schedule will be drawn on the total loan amount(including subsidy) in such a way that the subsidy amount is adjusted afterliquidation of net bank loan (excluding subsidy).(ii) Repayment period will depend upon the cash flow and will be up to 11 yearsincluding a grace period of two years. The first annual instalment will fall due after24 months from the date of first disbursement.(iii) Rate of interest to borrowers on term loan shall be at PLR of the bank (or thelead bank) as per RBI guidelines. Interest will be chargeable from the date of thefirst disbursement of loan.(iv) The financial institution may also provide working capital separately forundertaking business by entrepreneurs.(v) NCDC may follow its own norms for period of term loan, its repayment,moratorium, interest rates, etc.6. TIME LIMIT FOR COMPLETIONA time limit of 18 months is prescribed for completion of the project from thedate of disbursement of the first instalment of loan by the financial institution.However, if reasons for delay are justified, a further grace period of 6 months may beallowed by the financial institution.However, in case of large integrated agricultural marketing infrastructureprojects involving total outlay of Rs.2 crore or more and requiring phasing, a timelimit of maximum of 36 months may be prescribed for completion of the project fromthe date of disbursement of the first instalment of loan by the financial institution.If the project is not completed within the stipulated period benefit of subsidyshall not be available and advance subsidy will have to be refunded forthwith.7. REFINANCE ASSISTANCE FROM NABARDFor Agricultural Marketing Infrastructure projects, NABARD would providerefinance to Commercial Banks/RRBs/ADFCs/SCBs/SCARDBs and such othereligible institutions @ 90% of the amount financed by the banks as term loan.However, quantum of refinance would be 95% in case of SCARDBs in north-easternregion. The rate of interest on refinance will be decided by NABARD from time totime and at present it is @ 6.75% per annum.-9-