Agriculture in India dates back all the way to Indus valley civilization. Agriculture industry alone contributes to 17.32% in 2017. Historically India is a country with very strong focus on agriculture. We are the 7th largest exporter of agriculture products to at least 120 countries. Even though India has such good history and knowledge when it comes to agriculture, farming in India has started to decline.

Farmers depend on multiple factors to have a great yield – power, rainfall, good piece of land, equipment/machinery and funds to get all the above. To improve farming and give farmers benefits Canara bank offers agriculture loans at a very competitive rate.

Agricultural Loan Eligibility

Agricultural loans are extended to all types of farmers such as small and marginal farmers, tenant farmer, share croppers and oral lessees.

Documents required

Banks sanction agricultural loans, both long-term and short-term to farmers for agricultural activity. Keeping in view the illiteracy of farmers, the documentation requirement is few. However, banks insist on the following documentation for agricultural loans:

  • ID proof-Voter ID, Photo ration card. Aadhar etc.

  • Residence proof-Ration card

  • Land ownership proof-records of rights, revenue receipt etc.

  • Kisan Credit Card-This is a card issued to all farmers including small and marginal farmers, tenant farmer, share croppers and oral lessees

With the above documents submitted falling under the eligibility criteria you can easily avail loan by visiting any local branch to avail loan.

Canara bank agriculture loan interest rate

The interest rate is around 7% up to 3 lakhs where the Government also provides interest subsidies of 3% which means the rate of interest is effectively only 4%.

  • Agriculture Loans up to Rs.3.00 lacs: MCLR+1.40%

  • Agriculture Loans above Rs.3.00 lacs up to Rs.1.00 Crore: MCLR+2.30%

  • Agriculture Loans above Rs.1.00 Crore up to Rs.2.00 Crore: MCLR + 2.30% to MCLR + 3.50%

  • Agriculture Loans above Rs.2.00 Crore (Rated Internally under RAM Model): MCLR + 2.40% to MCLR + 3.75%

  • Agriculture Loans above Rs.5.00 Crore (where external rating undertaken): MCLR + 1.40% to MCLR + 4.50%

Gold Loans for Non-Crop Purpose

Gold Loans for crop production purpose up to Rs 3.00 lacs is eligible for Interest Subvention. ROI of 9% to be during subvention period. Beyond the period of interest subvention, applicable card rate as applicable to agricultural loans is to be charged.

  • Gold Loans and GLOD for Agricultural Purposes: MCLR + 0.45%

  • Gold Loans and GLOD above Rs.2.00 lacs up to Rs.5.00 lakhs: MCLR + 2.45%

Rate of Interest for SHG Loans

Up to Rs.3 lakhs: MCLR + 1.30%

Above Rs.3 lakhs: 1. SHG 151 to 170: MCLR + 1.55% & 125 to150: MCLR + 2.05%

2. SHG with 100-124 points: MCLR + 2.80%

Estate Purchase Loan (Term Loan Only): MCLR+6.55

For loans, repayable more than 1-year up to 5 years and more than 5 years, the liquidity premium to be loaded to the card rates additionally as given below:

  • Repayable 1-year up to 5 years – 0.40%

  • Repayable more than 5 years – 0.85%

For running limits, viz., OD/OCC/KCC, one-year MCLR will be applicable irrespective of the tenability/extension/short renewal permitted.

We hope that this article would have provided you with the information that is required to take a loan from Canara bank.