Agricultural loans are offered to farmers and can be used for various purposes such as purchasing land, tools and equipment, machinery, seeds, investing in farm maintenance, crop insurance, etc. Farming is a seasonal activity and farmers require financial support to help them sail through periods of no activity. In India, several commercial banks offer easy loans and credit access to farmers. In this article, we highlight the best banks for agriculture loans in India.
Which are the best banks for agriculture loans in India?
1. State Bank of India (SBI)
State Bank of India (SBI) is the market leader when it comes to agriculture-related financing. It has a wide network of branches spread across the country and offers financing facility to nearly 1.01 crore farmers. SBI offers a whole range of services to facilitate agriculture and allied activities. Salient features of agriculture loans and agriculture credits from SBI Bank are:
No hidden cost
Immediate loan sanction
Agriculture loans offered by SBI cover a wide range of agricultural activities. The bank offers finance for crop production via ACC/KCC (Kisan Credit Card). It includes support for crop production expenses, post-harvest costs, any emergencies etc. The Kisan Credit Card (KCC) is offered as an electronic Rupay Card. Through this, farmers can withdraw money from ATMs, purchase essential items such as fertilizers at PoS.
SBI also offers loans for purchasing machinery such as tractors, tillers, combined harvesters, etc. Loans are also designed to cover other agricultural activities such as poultry farming, dairy, fisheries etc.
2. ICICI Bank
ICICI Bank’s agriculture loan allows farmers to purchase agricultural equipment and also farm animals. Farmers can repay these loans over 3 to 4 years and can opt for monthly/half-yearly/ annual instalments. ICICI agriculture loan is hassle-free since it allows easy documentation, convenient and custom repayment options and does not have any additional or hidden charges. For availing this loan, farmers must submit a duly filled application form, required KYC documents, land-related documents, etc.
Additionally, ICICI Bank also offers a Kisan Credit Card(KCC) to farmers. Farmers can make use of this card to withdraw money at ATMs across the country. To avail the benefits of KCC, farmers must have a piece of farming land and must fulfil the age criteria of 18 to 70 years.
3. HDFC Bank
HDFC is a leading private sector bank in India and it is known to be fully committed to making sure that all of the banking related benefits can be accessed by all sectors across the country. This is particularly true for rural areas and specifically the agriculture sector. HDFC bank offers necessary agricultural loans of differing tenures to customers involved in farming, horticulture, poultry, animal husbandry, plantations, dairy, seeds trade, warehousing, etc.
The bank also offers funds towards supplies of different agriculture-related inputs like seeds, fertilizers, micronutrients, pesticides, micro-irrigation tools, etc. HDFC bank has narrowed down on food processing, storage, transportation, and allied agriculture commodities as a key focus area and provides working capital along with term loans to processors. This is provided with their financials positive and the underlying commodities can act as assets. HDFC has been increasing its rural footprint at a fast pace to cater to these products efficiently and offer value-added services to such valued customers at competitive rates.
4. Punjab National Bank (PNB)
Punjab National Bank offers various financial products specifically designed for the farming sector. For example, a person can apply for loans from PNB to establish a biogas unit or for irrigation-related apparatus, development of wastelands, etc. Individuals who are keen to pursue a career in apiculture (also known as beekeeping) may reach out to the bank for financial assistance.
PNB also offers finance of warehouse receipt plus insurance coverage. It offers monetary support to growers in case there is a crop failure because of natural disasters, diseases, pest attack, etc. This scheme is popularly known as Pradhan Mantri Faisal Bima Yojana. This is over and above the regular financial services that farmers can avail, including Kisan Credit Card, debt swaps, etc.
Additional Reading: Latest Agriculture Loan Interest Rates in India
5. Allahabad Bank
Allahabad Bank is another nationalized bank that provides Kisan Credit Card (KCC) as part of its Akshay Krishi scheme. This scheme is designed to provide sufficient and timely aid under a single blanket to farmers. Features of this scheme are:
Crop loan - Cash Credit
Allied activities such as Working capital for agriculture-related activities
Term loan - for Capital requirements
Allahabad bank has a Potato Growers Credit Card Scheme. This scheme provides sufficient and timely financial support under a single blanket to individuals engaged in agriculture or allied activities. The bank also offers loans for the purchase of machineries such as Tractors and Power Tillers. Farmers who have a permanent residence in the vicinity of the bank’s branches and hold a good reputation can apply for this loan.
6. Axis Bank
Axis bank has been helping farmers for many years via its diversified financial support schemes like tractor loans, Kisan Credit Card (KCC), warehouse receipt financing, gold loans, rural godown loans, etc. The Bank has also laid out a product called Contract Farming which requires loan agreements to be entered between farmers and corporates. The amount is sanctioned by the lender for manufacturing and supply of the product. It is then looked after by the Fair Practices Lending Code.
Axis Bank also has a Pisciculture Loan which offers timely and all kinds of loan requirements of farmers engaged in the cultivation of Fresh fish/brackish water fish or prawns.
7. Oriental Bank of Commerce (OBC)
Oriental Bank of Commerce has come up with the Kisan Credit Card-Oriented Green Card (OGS) which is offered to farmers for their working capital needs and financial assistance in crop production. It encompasses all farm activities, equipment maintenance etc. The bank also provides term loans for investment needs to people who own this card. The card is given to – farmers, cultivators, and artisans. Individuals in farm-based and non-farm-based activities qualify for this card. Some of the other agriculture-related banking products offered by the bank are:
Model Scheme for Coconut Farming related finance
Advance for Warehouse Receipts
Purchase of Agriculture Land
Agriculture Business Centres
Finance for Working Capital needs of Cold Storage
Finance for Timber Merchants and Saw Mills
Agricultural Loan offered against gold jewellery as Security
Two Wheelers / Three Wheelers finance for farmers
Finance for Purchase of Tractor
It is important to select the right lender to meet any agriculture-related capital needs. One can approach any of the above-mentioned banks mentioned to avail easy loans. Apart from these banks, there is Canara Bank, UCO Bank, Indian Overseas Bank, Syndicate Bank, Oriental Bank of Commerce, Vijaya Bank, etc which offer credit facilities to farmers.
While searching for best agriculture loans, one must shortlist banks for simple documentation, flexible repayment options, reasonable interest rates, no hidden costs and fast processing of loans.