SBI Produce Marketing Loan (PML)

State Bank of India (SBI) offers “Produce Marketing Loan” for the farmers. Under this scheme, the bank provides security to the farmers against distress sales of their crop production when the prices are low. In this article, we look at the Produce Marketing Loan (PML) in detail.

Objective

The primary objective of the scheme is to enable prompt repayment of crop loan dues and give liquidity to farmers to meet contingency needs. It also provides the facility of loan against the stocks stored in farmhouses, in addition to loan against warehouse receipts.

Eligibility Criteria

The farmer applicant should satisfy the below criteria to apply for the Produce Marketing Loan (PML).

All non-defaulter borrowers of the bank, those who can store the produce either in their own farm/premises itself or in a Warehouse/cold storage\ are eligible to get the loan under this scheme.
The farmer applicants who have availed crop production loans from the branch or who have availed crop loan from other Bank or who have not availed crop loan from any Bank can avail SBI Agriculture Produce Marketing Loan.

Documents Required

The following documents/Proofs are to be furnished along with the application form:

Application form (Duly filled)
Proof of stocks at the residence of the borrower
Stock statement for valuation
Identity Proof: Aadhaar, Driving License, PAN card, Voter Identity Card, etc.
Address Proof: PAN, Valid Passport, Utility bill, etc
Godown Warehouse receipt (duly endorsed)
Bank account details.
Passport size photo of the applicant.
Any other document required by the bank

Quantum of Loan

The bank offers the loan amount to the maximum limit of Rs. 10 Lakhs whereas that depends on the crop production of 60 to 80% of values and the place of storage.

Security

Primary Security: Hypothecation of stocks. Collateral Security: The Mortgage / Charge over Land or third party guarantee for loans above Rs. 1 Lakh. Loans that are sanctioned against Warehouse Receipts (WHR):

Primary Security: Pledge of stocks.
Collateral Security: No collateral is required for the loans up to the maximum limit of Rs.10 Lakhs under the scheme.

Insurance for Produce Marketing Loan

If the stock value exceeds the limit of Rs. 15000/-, then cover is provided for the full value from the approved insurance company.

Margin Money

The loan sanctioned that is against goods stored in Farmer’s godown will be 40%, and the loans sanctioned against Ware House Receipts (WHR) will be 20% to 35%.

Repayment of Loan

The loan has to be reimbursed within the maximum time frame of 12 months depending upon the crop, and specific circles have different caps for different models of godowns.

Application Procedure

To apply for the SBI Produce Marketing Loan (PML), the farmer applicant has to follow the below procedure: Step 1: The applicant will have to approach the nearest

SBI branch to apply for the scheme. Step 2: The applicant must fill out the Produce Marketing Loan application form with all the requested details and have to attach the specified documents as required. Step 3: After completing the application form, submit it to the concerned bank official. Step 4: Upon submission, the verification process will be done by the bank official. Then, the applicant will be provided with an acknowledgement slip for further reference.

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Frequently Asked Questions

Common questions about Produce Marketing Loan for Farmers.

The SBI Produce Marketing Loan (PML) is a scheme offered by the State Bank of India (SBI) that provides financial assistance to farmers against their crop production. It aims to prevent distress sales of agricultural produce when market prices are low and enable farmers to repay crop loan dues and meet contingency needs.

Non-defaulter borrowers of SBI who can store their produce either in their own farm/premises or in a warehouse/cold storage are eligible for the SBI Produce Marketing Loan. Farmers who have availed crop production loans from SBI or other banks, as well as those who have not availed any crop loan, can apply for this scheme.

The main documents required for the SBI Produce Marketing Loan include a duly filled application form, proof of stocks at the borrower's residence, stock statement for valuation, identity proof (Aadhaar, Driving License, PAN card, etc.), address proof (PAN, Utility bill, etc.), warehouse receipt (if applicable), bank account details, and a passport-size photograph of the applicant.

The maximum loan amount offered under the SBI Produce Marketing Loan is Rs. 10 Lakhs. The actual loan amount depends on the crop production and the place of storage, ranging from 60% to 80% of the crop's value.

The primary security for the SBI Produce Marketing Loan is the hypothecation of stocks. For loans above Rs. 1 Lakh, collateral security in the form of a mortgage/charge over land or a third-party guarantee is required. If the loan is against a warehouse receipt, the primary security is the pledge of stocks, and no collateral is required up to Rs. 10 Lakhs.

Yes, if the stock value exceeds Rs. 15,000/-, insurance coverage is provided for the full value from an approved insurance company.

The margin money requirement for loans against goods stored in the farmer's godown is 40%, and for loans against warehouse receipts, it ranges from 20% to 35%.

The repayment period for the SBI Produce Marketing Loan is a maximum of 12 months, depending on the crop. Specific circles may have different caps for different models of godowns.

To apply for the SBI Produce Marketing Loan, the farmer needs to approach the nearest SBI branch, fill out the application form, attach the required documents, and submit the application to the concerned bank official. An acknowledgment slip will be provided for further reference.

No collateral security is required for loans up to the maximum limit of Rs. 10 Lakhs under the SBI Produce Marketing Loan scheme if the loan is sanctioned against warehouse receipts.