Mumbai: NCDEX Spot Exchange, a subsidiary of NCDEX, Friday signed an agreement with State Bank of India to promote financial inclusion through an electronic pledge facility that will enable farmers and traders to use their goods stored in an approved warehouse as financial assets.
"The collaboration will perform the important function of mobilising credit for the agricultural sector by creating secured collateral for banks," NCDEX Managing Director and CEO Samir Shah said a release.
Under the agreement, customers, who want to avail pledge finance, have to deposit their goods in NSPoT-accredited warehouses.
The banks issuing pledge finance will provide loans using the deposited goods as collateral.
When the collateral is sold, banks will directly receive payment against the loan.
All farmers, processors and traders who hold goods in NSPoT-designated warehouses can avail of this facility.
The facility will be launched initially in Maharashtra, Karnataka, Madhya Pradesh and Rajasthan.
First Published: Friday, March 28, 2014, 22:14