India is an agriculture-driven country, and governments and banks run several schemes for farmers, from loans and financial help to compensation when crops are damaged by natural calamity or other reasons. Among bank schemes, one that draws attention is the Cent Agri Gold Loan run by the public-sector Central Bank of India, designed to meet farmers' agricultural loan needs quickly, for both crop production and investment.
Under the scheme, a farmer can get a loan of up to Rs 20 lakh by pledging gold or gold jewellery with the bank, which then lends against the pledged gold. According to the bank's official website, the loan amount is Rs 3,250 per gram for gold of 22 carat purity and Rs 3,550 per gram for 24 carat purity, subject to periodic review based on the market price of gold, with the maximum loan capped at Rs 20 lakh.
Who is eligible and how to apply
To be eligible, the applicant must be an Indian citizen, aged 18 years or more, and engaged in farming or allied agricultural work, in other words a practising farmer. To apply, visit the nearest Central Bank branch and contact the loan officer or staff concerned.
Before going to the bank, carry an identity proof, KYC documents, address proof, farming or agriculture-related papers and passport-size photographs, and take the gold to be pledged safely. The bank officer will get the gold's purity checked, after which the application form must be filled and submitted. Once approved, the loan amount is sent to the applicant's account within the timeline fixed under the bank's rules.
Interest rate, charges and repayment
On interest, the scheme charges 7 percent per annum up to Rs 3 lakh with interest subvention. Without interest subvention, the rate is MCLR plus 0.25 percent. MCLR, or Marginal Cost of Funds Based Lending Rate, is the minimum lending rate below which a bank cannot lend to its eligible customers.
Processing fee is nil for production loans, and for other loans it is nil up to Rs 3 lakh and 0.30 percent above Rs 3 lakh. The initial charge is nil up to Rs 5 lakh and Rs 5,000 plus GST above Rs 5 lakh. On repayment, a cash credit or overdraft limit remains valid for five years subject to annual review, a demand loan must be repaid within a maximum of 18 months based on income generation, and a term loan within a maximum of five years. Rates and details can change, so applicants should check the bank's official website or the nearest branch for the latest information before applying.
