Guidelines for Making Subsidy Claims

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 :

  1. 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,
  2. 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.
  3. The subsidy would be kept frozen by bank/FI in the Subsidy Reserve Fund Account (SRFA) of the Bank.
  4. 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:

  1. Financial appraisal report of the bank
  2. Term loan sanctioned letter issued by the bank with detailed terms and conditions.
  3. Term loan disbursement statement
  4. Undertaking in Format-IV
  5. 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.

  1. Completion Certificate by Bank/FI.
  2. Term loan disbursement details date-wise).
  3. 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

  1. 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.
  2. 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

  1. 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.
  2. 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.
  3. 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.
  4. 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

  1. 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
  2. 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:

  1. 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.
  2. 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.
  3. A signboard displaying “Assisted by National Horticulture Board , Ministry of Agriculture, Govt. of India” will be exhibited at the site.
  4. 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.
  5. Other operational instructions issued by NHB from time to time will be strictly followed.
  6. NHB reserves the right to recall any amount given under the scheme without assigning any reason thereof.
  7. The participating banks should ensure insurance of the assets created under the project wherever required statutorily.
  8. 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.
  9. 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

  1. Application Form in the prescribed Format of respective scheme
  2. Prescribed cost of Application form and scheme brochure
  3. 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.
  4. Detailed Project Report (DPR)
  5. Detailed Appraisal note by NHB authorized Bank/FI/ Institution
  6. Declaration in prescribed format from Mechanical Engineer in case of Cold Storage project.
  7. 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.
  8. Undertaking in prescribed format
  9. 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:

  1. The appraising banks/FI will adhere to the norms of appraising the project regarding technical feasibility and commercial/financial viability
  2. The decision of NHB with regard to eligibility and interpretation of the guidelines shall be final and binding on the beneficiaries.
  3. Pre and post inspection would be undertaken by NHB representative to find out the physical, financial and operational progress as and when required.
  4. A signboard displaying “Assisted by Natio nal Horticulture Board , Ministry of Agriculture, Govt. of India” will be exhibited at the site.
  5. Other operational instructions issued by NHB from time to time will be strictly followed.
  6. NHB reserves the right to recall any amount given under the scheme without assigning any reason thereof.