Under the arrangement, farmers and traders who have kept their commodities in NCDEX-approved warehouses, can use such commodities as collateral for availing financial assistance from Kotak Mahindra Bank, NCDEX said in a statement.
In addition to Kotak Mahindra Bank, HDFC Bank, Axis Bank and IndusInd Bank are also associated with the exchange for providing this facility, it added.
NCDEX said it has developed a unique electronic accounting system known as Comtrack for facilitating maintenance of record of commodities held by the participants in the approved warehouses for the purpose of delivery on the exchange platform.
Under the agreement between the exchange and these banks, customers desirous of availing financial assistance can deposit their goods in exchange approved warehouses and the banks providing pledge finance will provide loans using the deposited goods as collateral.
Also Read
Apart from banks, 10 NBFCs too have tied up with the exchange for extending pledge finance through this facility.
So far, Rs 946 crore has been disbursed against over 2.88 lakh tonnes of commodities, currently valued at Rs 1,358 crore, it said.
"Our recent tie up with Kotak Mahindra Bank is one more step forward in the process of bringing maximum number of banks into this ecosystem," NCDEX MD & CEO Samir Shah said.
Warehouse receipt financing is an important instrument to improve the credit access to agricultural producers. The efficiency of the inventory credit system in the country and the ecosystem that it creates for structured warehouse financing will go a long way in development of the agricultural sector in the country.