Cent Dairy Scheme

The Cent Dairy Scheme (CDS) is a program introduced by the Central Bank of India to provide financial assistance to dairy units. One of the primary objectives of the CDS is to ensure that farmers make use of the latest innovations in the field of

dairy farming. The CDS also aims to enhance the volume of milk production generated by the dairy units. The CDS is intended to benefit individuals, firms, non-governmental organisations (NGOs), and 1 which pursue dairy farming as the prime objective. Dairy farming enhances the economic and employment prospects available in the country. Dairy farming is a highly viable model of business since almost all regions across India are suitable for its establishment. The dairy farming methods recommended by the CDS are mostly eco-friendly. The dairy farming methods recommended by the CDS ensure an optimal yield from the same input resources. The CDS allows a farmer to market dairy products efficiently. Hence, the farmer need not concentrate on the advertising and promotional aspects of the business. Finance under the CDS is made available at a unit cost which is exclusive of Margin Money. The funding is disbursed as per the viability of the project and repaying potential of the borrower. The present article describes the details of the finance available under CDS.

Proposed Margin

The margin for finance available under this scheme depends on the quantum of finance obtained. The margin shall be the following:

For loans up to INR 1 lakh – no margin
For loans ranging between INR 1 lakh and INR 5 lakhs – 10%
For loans ranging between INR 5 lakhs and INR 10 lakhs – 15%
For loans above INR 10 lakhs – 20%

Rate of Interest

The following rates of interest are applicable for loan provisions under this scheme:

For loans of up to INR 50,000 – Marginal Cost of Funds based Lending Rate (MCLR)+0.50
For loans ranging between INR 50,000 and INR 25 lakhs – MCLR+1.00
For loans ranging between INR 5 lakhs and INR 25 lakhs – MCLR+1.50
For loans ranging above INR 25 lakhs – MCLR+2.00

Loans covered by the scheme are not burdened with processing charges.

Inspection Charges

The following are the inspection charges for obtaining finance under the scheme:

For loans up to INR 2 lakhs – Nil
For loans ranging between INR 2 lakhs and INR 5 lakhs – INR 200
For loans ranging between INR 5 lakhs and INR 50 lakhs – INR 500
For loans ranging above INR 50 lakhs – INR 1000

Security

The type of security to be given varies according to the quantum of loan. The required security shall be the following:

For loans of up to INR 1 lakh – Hypothecation of Livestock and other assets created out of bank finance (requires no collateral).
For loans above INR 1 lakh – Creation of Mortgage/Charge on land having a market value to the extent of 100% of the loan amount (as a minimum).

Period of Repayment

No specific requirement has been specified concerning the period of repayment. The tenure would be based on the cash flow, and generally varies between a period of 3-7 years.

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Frequently Asked Questions

Common questions about Cent Dairy Scheme Financial Assistance for Dairy Units.

The Cent Dairy Scheme (CDS) is a program introduced by the Central Bank of India to provide financial assistance to dairy units. It aims to promote the use of latest innovations in dairy farming and enhance milk production.

Individuals, firms, non-governmental organizations (NGOs), and co-operative societies whose prime objective is dairy farming are eligible for the CDS.

The CDS promotes eco-friendly and efficient dairy farming methods, ensuring optimal yield with the same input resources. It also allows farmers to market their dairy products efficiently without focusing on advertising and promotion.

The margin requirement varies based on the loan amount, ranging from no margin for loans up to INR 1 lakh to 20% margin for loans above INR 10 lakhs.

The interest rates are based on the Marginal Cost of Funds based Lending Rate (MCLR) and range from MCLR+0.50% for loans up to INR 50,000 to MCLR+2.00% for loans above INR 25 lakhs.

No, loans covered under the CDS are not burdened with processing charges.

The inspection charges range from nil for loans up to INR 2 lakhs to INR 1000 for loans above INR 50 lakhs.

For loans up to INR 1 lakh, hypothecation of livestock and other assets created out of bank finance is required. For loans above INR 1 lakh, creation of mortgage/charge on land with a market value of at least 100% of the loan amount is required.

The article does not specify a fixed repayment period. It states that the tenure would be based on the cash flow and generally varies between 3-7 years.

The CDS promotes dairy farming in India by providing financial assistance and encouraging the use of latest innovations and eco-friendly methods. This enhances milk production and economic prospects in the dairy farming sector across various regions of the country.