The capital investment subsidy scheme has been launched to strengthen the domestic cultivation of more than 136 varieties of bamboo species and increase the income of the farmers. India has huge bamboo production and It generates more than 30,000 crores of income. The capital investment scheme is launched to provide a credit link facility to bamboo farmers through Financial Institutions under the National Bamboo Mission. The scheme encourages the farmers and entrepreneurs in the bamboo sector to submit their project proposals to eligible banks and obtain subsidies.
There are several activities by NBM that provide credit linked to getting subsidies from various banks and financial institutions. These assistances are the following:
The state-level bamboo development agency releases 50% of the eligible subsidy amount to the participating financial institutions after reevaluating the project scrutiny note form as per the norms of the national bamboo mission (NBM). At the end of the repayment duration, it will be the same in a subsidy reserve fund account of the respective borrower and adjusted with the loan amount of the banks at the completion of the project on time.
Final installments of subsidy
The State Level Bamboo Development Agency disburses the remaining amount of 50% to the eligible financial institutions and other lenders after conducting an inspection and recommendation of the project by the Joint Monitoring Inspection Committee. This Committee has representatives from banks and the State and District Level Bamboo Development Agency.
Adjustment of the subsidy
The adjustment of the subsidy will be maintained separately in an individual borrower-wise account. The agency adjusts the cost of complete projects, with the grant amount, and without the beneficiary's contribution amount, as credit by the banks. The repayment schedule will be drawn on the loan amount as the total subsidy amount is adjusted after the full bank loan component with interest also included.
Utilization Certificate has to be submitted by the financing bank certifying that the full amount of subsidy received as per the project after the disburse of the full loan amount or subsidy. This has been utilized and adjusted in the books of Account as per the sanctioned terms and conditions of the project according to the guidelines of the scheme.
No interest in subsidy portion
The agency releases grants to financial institutions on the principle of providing interest-free subsidies. The financial banks can charge interest on the entire loan amount of the project, but the subsidy amount could be excluded. The creditor balance of the Subsidy Reserve Fund account will not form part of demand and time liabilities for the purpose of SLR/CRR (cash reserve ratio).
The applicant can submit their project proposals to eligible financial institutions for a grant of subsidy. The following are the eligible financing institutions under the scheme:
Commercial Banks, Regional Rural banks (RRBs), State Cooperative Banks (SCBs), State Co-operative Agricultural and Rural Development Bank (SCARDBs), Scheduled Primary Urban Cooperative Banks (PUCBs), Agricultural Development Finance Companies (ADFCs), Northeastern Development Finance Corporation (NEDFT), Cooperatives where they take loans from National Cooperatives Development Corporation (NCDC).
The period of the repayment will be as per the cash flow and may be extended up to 8 years with a grace period of 1 year. Security will be as per the norms of the RBI (Reserve Bank of India), it may vary from time to time.