Public sector lender Punjab National Bank (PNB) has entered into a Memorandum of Understanding (MoU) with Warehousing Development & Regulatory Authority (WDRA). This will promote financing against Electronic Negotiable Warehousing Receipt (e-NWR), PNB said in a statement.

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"The partnership is aimed to provide information to farmers/depositors of agriculture produce about the benefits of e-NWR besides doing further outreach activities to improve agricultural pledge finance in India," it said.

The MoU was signed in the presence of Atul Kumar Goel, Managing Director and CEO of Punjab National Bank and T. K. Manoj Kumar, IAS Retd, Chairperson WDRA.

The e-NWR financing is considered to be a game changer in shaping the rural economy by preventing distress sale by farmers and helping them in realising better price for their produce.

The system has several benefits, being the only negotiable warehousing instrument.

"The process is fully digitized and comes with benefits like online lien marking, non-issuance of e-NWR above the capacity of warehouse and issuance of e-NWR only when scientific storage norms as stipulated by WDRA are fulfilled," PNB said.

In 2021, the Reserve Bank of India (RBI) increased the limit for loans against NWRs from Rs 50 lakh to Rs 75 lakh per borrower.

Earlier this month, PNB also signed a Memorandum of Understanding (MoU) with Central Warehousing Corporation to facilitate financing under e-NWR.

Agriculture is an important sector of the country’s economy and government has been focusing on increasing the income of the farmers who drive this segment. One of the main constraints in increasing farm income has been distress sale by the farmers. With a view to curbing the same, the bank said, it entered into the partnership.

First Published:Mar 14, 2023 5:30 PM IST