Calcutta, June 10: The National Bulk Handling Corporation (NBHC) is targeting a collateral funding of Rs 4,000 crore of agricultural commodities by the end of this fiscal.
The company, a sister concern of the Multi-Commodity Exchange of India Ltd, has already raised a collateral funding worth Rs 1,500 crore since last April.
“We are in talks with region-specific banks to increase their exposure to agricultural commodities. There has always been a lack of warehousing, processing and transit facilities for such goods. Through our nine-lakh-tonne storage capacity, fumigation, processing, warehousing, gradation and certification facilities, we have managed to convince the banks to increase exposure to agri-commodities,” said Anil Choudhary, managing director and CEO of NBHC.
NBHC aims to prevent fraudulent warehousing and gives a guarantee of six to nine months on the quality and quantity of the products. It also provides daily price information.
In case of a default, NBHC has the market linkages for the banks to sell the produce at the best spot rates.
The State Bank of India, State Bank of Indore, State Bank of Patiala, Bank of India, Syndicate Bank, IndusInd Bank, UTI and Development Credit Bank are already on board with NBHC.
Choudhary said 35 commodities have received collateral funding.
There are 16 that are not traded on the commodities market. Therefore, banks are reluctant to take an exposure on them.
These include perishable commodities such as coriander, tamarind and potato and a few types of paddy.
NBHC tries to get farmers up to 75 per cent of the value of their produce at 2 to 3 per cent lower rate of interest than the prime lending rate within two to three days.
The jute and tea sectors have also found it difficult to get collateral funding.
NBHC is in talks with banks in Bengal for exposure on jute, while it is still studying the market for tea before approaching the banks.
The company will form four clusters in Bengal in different regions of Calcutta, Burdwan, Siliguri and Tarakeshwar, concentrating on different crops such as paddy, potato and jute.