Land development bank

From Wikipedia, the free encyclopedia

A land development bank (Bengali: ভূমি উন্নয়ন ব্যাংক), in the short, LDB is a special kind of bank in India, and is of quasi-commercial type that provides services such as accepting deposits, making business loans, and offering basic investment products. The main objective of the LDB is to promote the development of land, agriculture and increase the agricultural production. The LDB provides long-term finance to members directly through its branches.[1]

History

The history of land development bank is quite old. The first LDB was started at Jhang in Punjab in 1920. Even though the first LDB was started in Punjab, the real progress began when the land development bank was established in Chennai in 1929.[2] Without it, land banks, land mortgage banks, agriculture banks, agriculture development banks are now called land development banks in modern world.

Type

There are different kinds of functions of land development banks in world. They also differ from one another in their bye-laws or constitutions. Some are organized on State basis, some on co-operative basis and some on Private basis, incorporating the joint stock principles.

Funds

The sources of funds of land development bank are:-

  1. Share capital
  2. Deposits from members or unmembers
  3. Issue of debentures
  4. Accepting loans
  5. Reimbursements of subsidies from the Govt.
  6. Other funds.

Loans and Advances

Land development bank provides long-term funds for various agriculture related projects besides development of land and business. The borrowing capacity of a member is generally determined according to the number of shares he holds in the bank. The loans granted by land development bank is repayable within 20 to 30 years. Normally, loans are granted up to 50% of the value of the land or up to 30 times the revenue. Loans are granted only after a thorough verification of security title-deeds as well as the necessity for the loan.The rates of interest for LT Loans are generally low and within the paying capacity of farmers. They are around 11 to 12%.

References

  1. ↑ TNAU. "LAND DEVELOPMENT BANK". TNAU Agritech Portal. Retrieved 8 January 2014. 
  2. ↑ Nupur Singh. "Co-operative Banking in India". Preserve Articles. Retrieved 9 January 2014. 
This article is issued from Wikipedia. The text is available under the Creative Commons Attribution/Share Alike; additional terms may apply for the media files.