Government asks banks to lend only on negotiable Warehouse receipts

Tags: Economics/Business

• The Government of India has  asked the bank to provide loans only against Negotiable Warehouse Receipt(NWR) and electronic-NWR or e-NWR.
•  This will encourage more warehouses to seek WADA(Warehouse Development Regulatory Authority ) registration and help in the development of the organised Warehousing   system in India .
• At present only 10% of the warehouses in the country are registered with WADA.
•  Farmers and businessmen can store their agricultural produce in WADA registered warehouses and can get a loan from banks against the receipt issued by the warehouses.
•  RBI has recently increased the loan limit for banks lending against NWR and e-NWR  to Rs 70 Lakh from Rs 30 Lakhs per borrower .
•  However, RBI did not increase the loan limit of the NWR  issued by non regulated warehouses.

According to the Government of India the  total cold storage capacity is 37.83 million tonnes and the warehouse capacity is 173.65 million tonnes in India.