Loans to Tea Sector


History & Contributions of Apex Bank in the Growth of Tea Industry in Assam

The Assam Co-operative Apex Bank Ltd had to take up financing of the Tea Gardens in 1950 due to non- availability of proper finance to the Indian  owned small and medium sized gardens from other financing agencies. During the economic crisis in the Tea Industry in 1952, when many indigenously owned gardens were refused finance by commercial Banks and were on the verge of closure, Sri Subhramaniyam Naidu , then Chief Officer, Agricultural Credit Department, RBI came to Shillong in the 1st Part of November 1952 and held discussion with the state Government and the Apex Bank officials for financing such Tea Gardens.  In 1953, the Government of India selected this Bank as one of the 9(nine) Banks in India to provide Finance to the Tea Estates under a scheme of Government Guarantee. The Apex Bank’s entry into the field of Tea Finance gave immense relief to the indigenously owned tea gardens in the state as otherwise many of them would have been closed as a result of the slump in the tea market during 1952.

Post 1964, Apex Bank continued financing the tea gardens through a society called the Assam Tea Planters Co-operative Society Ltd. Subsequently since 1973, the member gardens of the said Assam Tea Planters Co-op. Society Ltd started availing direct finance from the Apex Bank. 

The Bank continued to finance the Tea Sector till the year 2005. Then the Tea Sector in Assam faced a major recessionary period and as a result large number of tea gardens defaulted. To erase the rise of NPA, the Bank restricted itself from financing the Tea Sector & has been continuing to give more stress on the recovery aspects of the tea loans.

Recovery Measures :-
For recovery purpose the Bank adopts the following measures:

  • Settlement facility ( subject to Bank’s terms & Conditions)
  • Restructuring & Rescheduling facilities( subject to Bank’s terms & Conditions)
  •  Proceedings under BPDR Act, 1913.
  • Proceedings under Securitization and Reconstruction  of Financial Assets and Enforcement of Security interest (SARFAESI)  Act, 2002 .
  • Other Legal measures.

Board Level Tea Loan Monitoring Committee :-
A Board Level Tea Loan Monitoring Committee comprising of 3(three) Board of Directors and Managing Director of the Bank was constituted to  look into each and every aspects of Tea Loan Recovery.  

Types of Tea Advances :-

  1. Working capital tea finance   to Individuals & Society
  2. Term  loans :- S T. Loan, M.T. Loan & L. T. Loan  to
    • Small Tea Growers
    • Green Leaf Gardens
    • Gardens with factories
    • Bought leaf factories.

Current Rate of interest of loans & advances issued under tea sector

* Current rate w.e.f. 01.06.11 RATE OF INTEREST  PENAL INTEREST
Up to   Rs. 50,000/-
Above Rs. 50,000/- up to Rs.2.00 Lac
Above Rs.2.00 Lac up to Rs.5.00Lac
Above Rs.5.00 Lac up to Rs.25.00 Lac
Above Rs. 25.00 Lac
12.50% 12.00%
13.50% 13.00%
14.00% 13.50%
15.00% 14.00%
14.25% 13.50%

Above rates are subject to change.
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