1. Pattern of Release of Subsidy in credit linked cases
1.1. Full (100%) estimated advance subsidy when claimed after disbursement of more than 50%
term loan followed by full and final subsidy settlement after completion.
1.2 Full & Final subsidy, when estimated subsidy claim is not preferred and claim is submitted
directly after completion of project.
1.1.1 Procedure for release of estimated subsidy in loan cases:-
For proposals involving term loan , scheme provide to release full estimated subsidy (limited to amount
of sanctioned Term Loan) as per cost norms after disbursement of 50% term loan and final settlement of
subsidy claim for such cases will be done after completion of project and assessment of eligible project
cost by Joint Inspection Team and Committee of NHB. Accordingly, procedure for release of subsidy in loan
cases would be as under:-
1.1.1.1 Procedure for submission of documents/papers for estimated subsidy claim to the Board :
- Upon release of at least 50% amount of term loan by bank to promoter , the concerned FI/
Bank which has provided credit for the project shall submit subsidy claim to NHB in prescribed
Format II-A as under:-
- To respective State Office of NHB - up to the project cost of Rs.50.00 lakh.
- To NHB, HQ, Gurgaon where the project cost is above Rs. 50.00 lakh,
- Committee of NHB will consider proposal of FI/Bank for release of estimated subsidy and NHB
would release 100% estimated subsidy to the concerned bank/FI as per prevailing cost norms
in eligible cases approved by the committee.
- The subsidy would be kept frozen by bank/FI in the Subsidy Reserve Fund Account (SRFA) of
the Bank.
- Release of estimated subsidy will not exceed the limit of sanctioned term loan by FI/Bank for
the project.
Documents to be submitted with the estimated subsidy claims :-
Upon release of at least 50% amount of term loan by bank to promoter , the concerned FI/Bank
which has provided credit for the project shall submit subsidy claim to NHB in prescribed Format II-A with
following documents:
- Financial appraisal report of the bank
- Term loan sanctioned letter issued by the bank with detailed terms and conditions.
- Term loan disbursement statement
- Undertaking in Format-IV
- Release of at least 50% of term loan into project Bank loan account
1.1.1.2 Final subsidy claim on completion of project and upon release of final withdrawal of term loan by the Bank/FI.
Soon after completion of the project and disbursement of full term loan, the concerned FI/Bank
shall submit final subsidy claim in prescribed format II-B. Bank/FI must ensure that claims are filed within
prescribed time limit of 18 month for the date of release of 1st installment of term loan. A Joint Inspection
Team (JIT) consisting of representative from bank, NHB, State Hort./Agri. Department , Expert (in case of
Cold Storage and Ripening unit) will conductjointinspection ofthe projectto settle the final subsidy claim.
Final amount shall be determined on the basis of the Joint Inspection Team and approval of appropriate
committee of NHB.
Documents to be submitted with final subsidy claim
Final subsidy claim shall be submitted to the Branch Office of NHB or to the Head Office, NHB as the case may be, in format II-B along with following documents.
- Completion Certificate by Bank/FI.
- Term loan disbursement details date-wise).
- Statement of Expenditure incurred certified by bank for project costing upto Rs. 50.00 lakh or
by Chartered Accountant (CA), if project cost exceeds Rs. 50.00 lakh.
1.1.2. Procedure for claim of subsidy, for cases where advanced subsidy claim is not preferred
Claim can also be submitted after completion of the project. In such cases all documents mentioned
with estimated subsidy claim as well as final subsidy claim will be required to be enclosed excepting
statement of at least 50 % term loan disbursement.
1.1.3. Time limit for Completion of project
- Time limit for completion of the project would be maximum of 18 months period from the
date of disbursement of the 1st installment of term loan , which may be extended by a further
period of 3 months, if reasons for delay are considered justified by the financial institution
concerned and agreed to by NHB.
- Ifthe projectis not completed within stipulated period, benefit of subsidy shall not be available
and advanced subsidy placed with the participating bank, if any, will have to be refunded to
NHB forthwith or not later than 30 days after such period.
1.1.4 Procedure for adjustment of subsidy
- Subject to availability of fund, full estimated subsidy amount shall be released as soon as
the 50% of the term loan is released to the beneficiary. The estimated subsidy released by
NHB would be kept frozen by bank/FI in a separate account termed as Subsidy Reserve Fund
Account (SRFA) of the Bank. Subsidy so release shall be frozen in the subsidy reserve fund
until the completion of the project and released finally after inspection. Banks shall not charge
interest from the beneficiary to the extent of amount available in the Subsidy Reserve Fund for
which due credit be given to the beneficiary.
- Final settlement will be made only after Joint Inspection by Bank, NHB and State Government
representative, and clear written advice of NHB with regard to the eligible project cost and
amount of subsidy to be released to the promoters account.
- The subsidy will be released to the borrowers term loan account by bank only after receiving
the written advice of NHB for this purpose and balance amount would be refunded to NHB
within 30 days. For any delay beyond it, bank will be liable to pay interest on the refundable
amount. Subsidy amount in the borrower’s term loan account should be adjusted only as part
of the recovery of last installment.
- The subsidy should be refunded if the account becomes an NPA.
1.1.5 Submission of the Utilization Certificate by the Bank/FI.
The bank/FI shall submit toNHB Utilization Certificate of the subsidy amount in prescribed Format IV-D
1.1.6 Mechanism to keep track of amounts released to various Banks by way of subsidy, amount utilized and the amount to be collected back from banks that are not disbursed
- Bank branches will furnish the information regarding Account No. of SRFA, name of the project,
date and amount of subsidy released by NHB in SRFA, , date, amount of subsidy adjusted in
term loan (with Account number), date and amount refunded by bank to NHB on quarterly
basis to the state offices of NHB (and also the Head office of NHB in case the subsidy has
been released directly by Head Office). State Office In-charge shall review the subsidy releases
every month and will monitor its utilization and refund. State-wise register will be maintained
by concerned Centre In-charge for centres and by the Finance & Accounts Division for Head
Office. Area Officers shall review the subsidy release, utilization and refund quarterly
- Internal audit will be conducted (on test basis) of the subsidy release, utilization and refund as
per the provisions of the guidelines. F&A Division shall overall monitor the releases, utilization
and refund of subsidy regularly and to bring out cases of default and issue suitable advice to
concerned Area Officers for taking corrective measures.
1.1.6 Other Provisions:
- Letter of Intent (LOI) will be voluntary for the promoter and would be issued only on the
request of the promoter. This will not be required for claim of subsidy.
- The participating banks will adhere to the norms of appraising the project regarding technical
feasibility and commercial/financial viability before the release of term loan to ensure that the
project is new, meets the guidelines of NHB, and the promoter has clear land title or lease hold
right over the land.
- A signboard displaying “Assisted by National Horticulture Board , Ministry of Agriculture, Govt.
of India” will be exhibited at the site.
- Any other pre and post inspection would be undertaken by NHB representative to find out the
physical, financial and operational progress as and when required.
- Other operational instructions issued by NHB from time to time will be strictly followed.
- NHB reserves the right to recall any amount given under the scheme without assigning any
reason thereof.
- The participating banks should ensure insurance of the assets created under the project
wherever required statutorily.
- Claim can also be submitted after completion of the project. In such cases all documents
mentioned with estimated subsidy claim as well as final subsidy claim will be required to be
enclosed excepting statement of 50 % term loan disbursement.
- The decision of NHB with regard to eligibility and interpretation of the guidelines shall be final
and binding on the beneficiaries and banks.
1.2 Procedure for claim of subsidy without term loan
Release of Subsidy need not be credit linked in North Eastern States for Commercial Horticulture
Scheme and for the institutions like Public Sector Units, Panchayats, cooperatives, registered societies/
trust and public limited companies for both Commercial Horticulture Scheme as well as Cold storage
scheme of Board provided they can meet remaining share of the project cost out of their own resources.
Such projects will have to be appraised by appraising agency approved by NHB. Subsidy in such cases
would be considered only for new projects after completion of the project and Joint inspection by team
constituted by NHB.
1.2.1 Documents to be submitted with Application Form / Subsidy claim
- Application Form in the prescribed Format of respective scheme
- Prescribed cost of Application form and scheme brochure
- Certified copy of record of right over the piece of project-land. In case of lease of land for
the project a certified copy of lease deed which should be registered at the time of subsidy
claim & for North-Eastern States, land possession certificate issued by State Govt. may also be
accepted.
- Detailed Project Report (DPR)
- Detailed Appraisal note by NHB authorized Bank/FI/ Institution
- Declaration in prescribed format from Mechanical Engineer in case of Cold Storage project.
- Basic Data Sheet in prescribed format in case of Cold Storage/Ripening chamber and reefer Van
projects. This will be evaluated by NHB empanelled technical expert to confirm compliance of
notified Technical Standards.
- Undertaking in prescribed format
- Statement of Expenditure incurred certified by Chartered Accountant (CA)
1.2.2 List of Appraising agencies for non credit-linked projects
Sl. No. |
Proposal from |
Appraising Agencies |
01 |
North Eastern states |
North Eastern Development Finance Cooperation
(NEDFI), NABCONS, Nationalized Commercial Banks |
02 |
Cooperative Sector |
NCDC & Nationalized Commercial Banks |
03 |
Public Sector Organizations and
Autonomous Body |
NABARD/NABCONS, Nationalized Commercial
Banks |
04 |
Regd. Societies/Trust and Public Sector
Companies |
NABCONS, Nationalized Commercial Banks |
1.2.3 Other Provisions:
- The appraising banks/FI will adhere to the norms of appraising the project regarding technical
feasibility and commercial/financial viability
- The decision of NHB with regard to eligibility and interpretation of the guidelines shall be final
and binding on the beneficiaries.
- Pre and post inspection would be undertaken by NHB representative to find out the physical,
financial and operational progress as and when required.
- A signboard displaying “Assisted by Natio nal Horticulture Board , Ministry of Agriculture,
Govt. of India” will be exhibited at the site.
- Other operational instructions issued by NHB from time to time will be strictly followed.
- NHB reserves the right to recall any amount given under the scheme without assigning any
reason thereof.
