The Gujarat State Co-Operative Agricultural and rural development bank ltd

Loan Policy and Project Approach

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  2. Loan Policy and Project Approach

Bank has adopted production oriented loaning system and it gives loans only for productive purposes since 1954 which enables the farmers to get sustained rise in his farm output. Bank grants loans to farmers if the loan propositions is found economically viable and technically feasible. Loans are granted on the basis of repaying capacity arrived at after considering the economic feasibility of loan proposition by calculating the net incremental income expected to the generated from the proposed development on land under project approach. Various norms have been evolved to judge the repaying capacity and economic feasibility per hectare of land for a given proposition. Such norms save time in appraising individual loan application and maintain uniformity also. If the loan proposal involves big amount such as loaning for tube well, tractor, lift irrigation, market-yard, etc. individual appraisal is made of judge the economic feasibility without resorting to norms. Bank gives loans for about 61 different purposes of loan-all for the development of land and allied activities. The Bank has also started giving loans for non-farm sector which includes loaning to rural artisans, handicraft etc. Loan for rural housing and medium term kisans credit card in also avail to farmer.

Period of loan is decided on the basis of economic life use of the assets created out of loan coupled with repaying capacity of the intending borrower as per guidelines received from NABARD from time to time. Security of loan is land and or assets created by loan.