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Farm Smart, Borrow Smart – With Our Agri Overdraft

Strengthen Your Farm’s Finances with Flexible Agri Overdraft Solutions!

Overview

Agri OD is a type of short-term credit arrangement that banks and other financial institutions offer to farmers and agricultural enterprises. It enables the borrower to take out cash from the bank account up to a pre-approved limit in order to cover the operating expenses of their farming operations. The main purpose of the overdraft is to control changes in the agriculture industry's cash flow.

  • Hypothecation of Crops or Produce: The borrower pledges the crops or produce as security.
  • Fixed Deposits or Bank Guarantees: Some banks may also accept a fixed deposit or other guarantees from a reliable source as security.
  • Personal Guarantee: In some cases, the personal guarantee of the borrower or a third party may be required.
  • Renewable: The overdraft facility can be renewed annually or according to the agreed terms, based on the agricultural cycle.

Features

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Loan Amount:

The loan amount is typically determined based on the farmer's needs and repayment capacity.

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Interest Rates:

interest rate- As per the market standards

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Repayment:

Repayment options are usually flexible, allowing farmers to repay the loan based on their income cycle.

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Easy Access to Credit:

Agri OD provides farmers with easy access to credit for their various needs.

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Flexibility:

The overdraft facility allows farmers to withdraw and repay funds as needed.

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Timely Repayments:

Timely repayments can lead to additional interest subvention.

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Loans Based on Lease Agreements(demo)

Tenant farmers or sharecroppers can also apply based on lease agreements.

Eligibility Criteria

  • Banks calculate eligibility based on the scale of finance per acre set by the District Level Technical Committee (DLTC).
  • Loan amount (Scale of finance per acre) × (Total cultivable land owned).
  • The land may be mortgaged as security, depending on the loan amount.
  • Past credit history and CIBIL score are checked.
  • The type of crop cultivated influences the eligible loan amount.
  • High-value crops may lead to higher eligibility.

Documents Required

  • ID & Address proof
  • PAN Card
  • Business Registration Proof (Partnership Deed, MOA & AOA for Pvt. Ltd./Ltd. Companies, GST Registration, etc.)
  • Individual Profile (if applicable)
  • Last 3 Years' Audited Financial Statements (Balance Sheet, P&L, and Schedules)
  • Income Tax Returns (ITR) for Last 3 Years
  • Bank Statements for Last 12 Months
  • Guarantor’s KYC & Financials (if applicable)
  • Net Worth Statement
  • Lease agreement of agri property (if it is lease)

Frequently Asked Questions

Yes, banks may require land mortgage or other collateral for an Agri Overdraft (OD), depending on the loan amount and the lender's policies.

The eligibility of crops for Agri Overdraft (OD) depends on the bank's policy and government guidelines. Typically, seasonal crops, cash crops, horticultural crops, and plantation crops (such as paddy, wheat, sugarcane, cotton, vegetables, fruits, and tea/coffee) are eligible under Agri OD schemes like Kisan Credit Card (KCC).

Yes, an Agri Overdraft (OD) facility is renewable annually, subject to the bank’s assessment of the farmer’s repayment history, crop cycle, and financial needs. Some banks may offer renewals for up to 5 years without requiring fresh documentation.

Yes, land documents are required for Agri Overdraft (OD) to verify ownership, cropping pattern, and loan eligibility.

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