Institutional Lending


  • The eligible financing institutions under the scheme are I) Commercial Banks, Regional Rural banks (RRBs), State Cooperative Banks (SCBs), State Co-operative Agricultural and Rural Development Bank (SCARDBs), Agricultural Development Fianance Companies (ADFCs), North Eastern Development Finance Corporation (NEDFI), and such other institutions which will be eligible for refinance from NABARD. Ii) Scheduled Primary Urban Cooperative Banks (PUCBS), and Co-operatives where they seek loan from NCDC.


  • 50% of the project can be raised as term loan from the financing banks. As the subsidy is back-ended, eligible amount of the subsidy (25%) would be initially allowed as term loan to the beneficiary. The repayment schedule will be drawn on the total loan amount (including subsidy) in such a way that the subsidy amount is adjusted after liquidation of net bank loan (excluding subsidy).
  • Repayment period will depend upon the cash flow and will be upto 11 years including a grace period of one year. The first annual installment will fall due after 23 months from the date of first disbursement.
  • Rate of interest to borrowers on term loan shall be as per RBI guidelines. This is applicable form the date for the first disbursement of loan.
  • The financial institution may also provide working capital separately for undertaking business by entrepreneurs.

Procedure to be followed for sanctioning of project & release of subsidy


  • Interested promoter will submit the project proposal for term loan and subsidy to Bank on application form as prescribed by the concerned Bank along with project report and other documents for appraisal and sanction of loan. A copy of the proposal shall also be endorsed by the promoter to sub office / regional officer of DMI as per list enclosed at annexure VI.
  • Bank after appraisal and sanctioning of project will furnish a brief project profile-cum-claim form for advance subsidy in the prescribed format given at Annexure-I along with a copy of bank’s sanction letter to RO, NABARD with a copy to the sub office / regional office of DMI as per list enclosed at annexure VI.
  • NABARD on receipt of project profile cum claim form from participating bank will sanction and release 50% advance subsidy to the participating bank for keeping the same in the Subsidy Reserve Fund Account (Borrower wise). NABARD will forward a copy of claim form as indicated in annexure I to Head Office of DMI project-wise for replenishment or adjustment against advance subsidy provided by DMI to NABARD. The release of subsidy by NABARD will be subject to availability of funds from DMI.
  • When the project is nearing completion, the promoter will inform the bank who will initiate action for an inspection by the Inspection Committee consisting of officials from bank, NABARD and DMI to ensure that the rural godown conforms to technical & financial parameters. After inspection is conducted, the bank will submit the claim form for final subsidy in the prescribed format given in annexure II to NABARD, in triplicate, with a copy to Regional office / sub-office, DMI. The inspection report of committee and completion certificate should be enclosed with claim form for final subsidy to banks, which will be replenished by DMI or adjusted against the subsidy amount provided to NABARD in advance
  • In case of Onion Godowns, NHB has advised that the Joint Monitoring Committee (JMC) for release of subsidy to onion godowns may consist a representative from National Horticulture Research and Development Federation (NHRDF). In case NHRDF official is not available, one representative from concerned State Horticulture/Agriculture Department may be co-opted in addition to the representative of NHB from the concerned State in the JMC