Forward Sales Contract
Forward Sales Contract is a contract of sale of goods between the farmer who agrees to sell their agro-products of certain amount with quality and the buyer agrees to purchase the goods as agreed on a future date with the agreed price, at an earlier stage.
For Whom
Buyers/Sellers entered into the Forward Sales Contracts for marketing of agricultural commodities and falling into one of the following categories are eligible to receive credit facilities under the scheme. -
Individual Farmers/Individuals
- Farmer Organizations
- Farmer Companies
- Partnerships
- Co-operative Societies
- Limited Liability Companies
Maximum Credit Limit
The upper limit of loan for paddy purchase subject to Forward Sales Contract under the New Comprehensive Rural Credit Scheme is Rs. 50 M.
Repayment Period
Maximum repayment period for Yala and Maha Seasons is 180 days for paddy and 270 days for the other crops.
Securities
Guarantors and pledge over paddy stocks to be purchased
or
Mortgage over immovable properties / Securities acceptable to the Bank
Product Features
- Buyers and sellers entered into a Forward Sales Contract to sell any agro products that belongs to the under mentioned category, are entitled to apply for this facility.
- The People's Bank function as a facilitator in the business activity.
- Loan facilities available for Yala and Maha seasons.
Paddy, potato, Chilli, Red Onion, Big Onion, Maize, Soya beans, Black gram, Pineapple, Tomato etc.
Benefits
- Farmer can obtain loans subject to the Forward Sales Contract.
- Can obtain facilities upto 60% of the FSC agreement and be within the repayment capacity.
- Possession of an account when applying for a facility is not necessary.
Benefits for Buyers/Millers/Producers
- Maximum loan limit 75% value of the Forward Sales Contract agreement.
- Should possess the repayment capacity and storage capacity.
- Possession of an account when applying for a facility is not necessary.
Benefits for farmers
- Farmer can sell his agro products to a fare price.
- Can obtain a better harvest with the help of modern methods.
- Can improve the quality and the bulk of the harvest.
- Obtain an Insurance cover for the damage of the cultivation.
- To have a good income through out the year.
Benefits for millers - Can purchase quality agro products.
- Can obtain loan facilities at the interest rate 12% or less.
- Since the purchase price is known well in advance, the best selling price can be decided.
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