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The Banking 
 was once a simple and reliable business that took deposits from
investors at a lower interest rate and loaned it out to borrowers at a higher rate.

Banking is generally a highly regulated industry, and government restrictions on

financial activities by banks have varied over time and location.

Banks act as payment agents by conducting checking or current accounts for

customers, paying cheques drawn by customers on the bank, and collecting cheques
deposited to customers' current accounts

Banks borrow money by accepting funds deposited on current accounts, by accepting

term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend
money by making advances to customers on current accounts, by making installment
loans, and by investing in marketable debt securities and other forms of money lending.

Banks provide almost all payment services, and a bank account is considered
indispensable by most businesses, individuals and governments. Non-banks that
provide payment services such as remittance companies are not normally considered
an adequate substitute for having a bank account.

Banks borrow most funds from households and non-financial businesses, and lend most
funds to households and non-financial businesses, but non-bank lenders provide a
significant and in many cases adequate substitute for bank loans, and money market
funds, cash management trusts and other non-bank financial institutions in many cases
provide an adequate substitute to banks for lending savings too.

Banks have become global industrial powerhouses that have created ever more
complex products that use risk and securitization

The Banking Industry at its core provides access to credit. In the lenders case, this
includes access to their own savings and investments, and interest payments on those
amounts. In the case of borrowers, it includes access to loans for the creditworthy, at a
competitive interest rate.

Risk and capital

Banks face a number of risks in order to conduct their business, and how well these
risks are managed and understood is a key driver behind profitability, and how
much capital a bank is required to hold. Some of the main risks faced by banks include:

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 Credit risk: risk of loss arising from a borrower who does not make payments as
promised.
 Liquidity risk: risk that a given security or asset cannot be traded quickly enough in
the market to prevent a loss (or make the required profit).
 Market risk: risk that the value of a portfolio, either an investment portfolio or a
trading portfolio, will decrease due to the change in value of the market risk factors.
 Operational risk: risk arising from execution of a company's business functions.
The capital requirement is a bank regulation, which sets a framework on how
banks and depository institutions must handle their capital. The categorization of
assets and capital is highly standardized so that it can be risk weighted.

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0ssets of the largest 1,000 banks in the world grew by 6.8% in the 2008/2009 financial
year to a record $96.4 trillion while profits declined by 85% to $115bn. Growth in assets
in adverse market conditions was largely a result of recapitalization. EU banks held the
largest share of the total, 56% in 2008/2009, down from 61% in the previous year. 0sian
banks' share increased from 12% to 14% during the year, while the share of US banks
increased from 11% to 13%. Fee revenue generated by global investment banking
totalled $66.3bn in 2009, up 12% on the previous year.
0   is a financial intermediary and appears in several related basic forms:

 a central bank issues money on behalf of a government, and regulates the money
supply
 a commercial bank accepts deposits and channels those deposits
into lending activities, either directly or through capital markets. 0 bank connects
customers with capital deficits to customers with capital surpluses on the world's
open financial markets.
 a savings bank, also known as a building society in Britain is only allowed to borrow
and save from members of a financial cooperative

The collapse of the Banking Industry in the Financial Crisis, however, means that some
of the more extreme risk-taking and complex securitisation activities that banks
increasingly engaged in since 2000 will be limited and carefully watched, to ensure that
there is not another banking system meltdown in the future.


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, one of the India`s largest private sector banks, announced a growth of
33.2% in net profit for thequarter ended March 2011 to Rs 11.15 billion over
the quarterended March 2010. Meanwhile, total income grew 34.38% during the
fourth quarter of financial year 2011 to Rs 67.24billion.
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The Gross Domestic Product or GDP is the indicator of the performance of an economy.
India currently stands as the 14th largest economy with a GDP of about $1.53 trillion
and this is slated to make improvement in the near future. The GDP in the previous year
was $1.25 trillion, making a rise of almost 6.5 percent. It is estimated that India's GDP
will touch the USD 2 trillion by the year 2015. However in order to get a better
understanding of the situated we can have a look at India GDP Composition Sector
Wise.

Sectors contributing to India GDP

India is a vast country, so the sectors contributing to the countries GDP are also many.
Various sectors falling under the India GDP composition includes food processing,
transportation equipment, petroleum, textiles, software, agriculture, mining, machinery,
chemicals, steel, cement and many others. 0griculture is the pre dominant occupation in
India, employing more than 50% of the population. The service sector accounts for
employing more than 25% while the industrial sector accounts for more than 10%.

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Let us have a look at India's GDP Composition Sector Wise

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  is one of the most significant part of India.

0griculture is the only means of living for almost two-thirds of the employed class in
India. 0s being stated by the economic data of financial year 2006-07, agriculture has
acquired 18 percent of India's GDP.

The agriculture sector of India has occupied almost 43 percent of India's geographical
area. 0griculture is still the only largest contributor to India's GDP even after a decline in
the same in the agriculture share of India. 0griculture also plays a significant role in the
growth of socio-economic sector in India.

In the earlier times, India was largely dependent upon food imports but the successive
stories of the agriculture sector of Indian economy has made it self-sufficing in grain
production. The country also has substantial reserves for the same. India depends
heavily on the agriculture sector, especially on the food production unit after the 1960
crisis in food sector. Since then, India has put a lot of effort to be self-sufficient in the
food production and this endeavor of India has led to the Green Revolution. The Green

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Revolution came into existence with the aim to improve the agriculture in India.

The services enhanced by the Green Revolution in the agriculture sector of Indian
economy are as follows:

• 0cquiring more area for cultivation purposesc

• Expanding irrigation facilities
• Use of improved and advanced high-yielding variety of seeds
• Implementing better techniques that emerged from agriculture research
• Water management
• Plan protection activities through prudent use of fertilizers, pesticides, and cropping
applications

0ll these measures taken by the Green Revolution led to an alarming rise in the wheat
and rice production of India's agriculture.0 Technology Mission was introduced in 1986
right after the success of National Pulse Development Programme to boost the oilseeds
sector in Indian economy. Pulses too came under this programme. 0 new seed policy
was planned to provide entree to superior quality seeds and plant material for fruits,
vegetables, oilseeds, pulses, and flowers.

The Indian government also set up Ministry of Food Processing Industries to stimulate
the agriculture sector of Indian economy and make it more lucrative. India's agriculture
sector highly depends upon the monsoon season as heavy rainfall during the time leads
to a rich harvest. But the entire year's agriculture cannot possibly depend upon only one
season. Taking into account this fact, a second Green Revolution is likely to be formed
to overcome the such restrictions. 0n increase in the growth rate and irrigation area,
improved water management, improving the soil quality, and diversifying into high value
outputs, fruits, vegetables, herbs, flowers, medicinal plants, and bio-diesel are also on
the list of the services to be taken by the Green Revolution to improve the agriculture in
India.

0GRIBUSINESS

The word agriculture indicate plowing a field, planting seed, harvesting a crop, milking
cows, or feeding livestock

0griculture has evolved in to agribusiness and has become a vast and complex system
that reaches for beyond the farm to include all those who are involved in bringing food
and fiber to consumers. 0gribusiness include not only those that farm the land but also
the people and firms that provide the inputs (for ex. Seed, chemicals, credit etc.),
process the output (for ex. Milk, grain, meat etc.), manufacture the food products (for ex.
icc cream, bread, breakfast ,cereals etc.), and transport and sell the food products to
consumers (for ex. restaurants, supermarkets).

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0gribusiness system has undergone a rapid transformation as new industries have

evolve and traditional farming operations have grown larger and more specialized. The
transformation did not happen overnight, but came slowly as a response to a variety of
forces.
Knowing something about how agribusiness came about makes it easier to understand
how this system operates today and how it is likely to change in the future. Initially
agriculture being the major venture it was easy to become a farmer, but productivity was
low. 0verage farmer produced enough food to feed just four people. 0s a consequence
most farmers were nearly totally self-sufficient. They produced most of the inputs they
needed for production, such as seed, draft animals, feed and simple farm equipment.
They consumed or used just about everything they produced. The small amount of
output not consumed on the farm was sold for cash. These items were used to feed and
cloth the minor portion of the country¶s population that lived in villages and cities. 0 few
agricultural products made their way into the export market and were sold to buyers is
other countries.
Farmers found it increasingly profitable to concentrate on production and began to
purchase inputs they formerly made themselves. This trend enabled others to build
business that focused on meeting the need for inputs used in production agriculture
such as seed, fencing, machinery and so on. These farms involved into the industries
that make up the ³agricultural inputs sector´. Input farms are major part of agribusiness
and produce variety of technologically based products that account for approximately 75
per cent of all the inputs used in production agriculture.
0t the same time the agriculture input sector was evolving, a similar evaluation was
taking place a commodity processing and food manufacturing moved off the farm. The
form of most commodities (wheat, rice, milk, livestock and so on) must be changed to
make them more useful and convenient for consumers. For ex. consumers would rather
buy flour than grind the wheat themselves before backing a cake. They are willing to
pay extra for the convenience of buying the processed commodity (flour) instead of the
raw agriculture commodity (wheat).
During the same period technological advance were being made in food preservation
method. Up until this time the perishable nature of most agriculture commodities meant
that they were available only at harvest. 0dvance in food processing have made it
possible to get those commodities all throughout the year. Today even most farm
families use purchased food and fiber products rather than doing the processing
themselves. The farms that meet the consumers demand for greater processing and
convenience also constitute a major part of agribusiness and are referred to as the
processing manufacturing sector.
It is apparent that the definition of agriculture had to be expanded to include more than
production. Farmers rely on the input industries to provide the products and service they
need to produce agricultural commodities. They also rely on commodity processors,
food manufactures, and ultimately food distributors and retailers to purchase their raw
agricultural commodities and to process acc

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The different segments of the priority sector are as follows:

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Small Scale Industries






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Small Business






Professional and Self-employed persons






Education






Housing Finance

The total credit extended by the public sector banks to agriculture, small-scale industry and
other priority sectors went up from Rs.440 crores in June, 1969 to Rs.1.71,190 crores in March
2002. As a result, advances to priority sectors as percentage of total credit increased from 15
percent in June 1969 to 43 percent in March 2002. The rate of progress was quite rapid soon
after nationalization but later progress was more modest. The relatively slow progress of
advances to the priority sectors was due to the fact that the bank officials from top to bottom
were not imbued with the new objectives of banking. At the same time banks were also
worried at the poor and unsatisfactory recovery performance of the agricultural and small
sectors.

The targets and sub-targets set under priority sector lending for UCBs are furnished below:

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Private sector HDFC Bank aims to ride the growth opportunities thrown up
by the increasing affluence of rural India to grow at a faster pace than the
industry average over the next few years, a top bank official said.

The bank will also focus on organic growth, having completed the
acquisition of Centurion Bank of Punjab (CBoP) a couple of years ago,
which has given it a strong pan-India footprint, he said.

³There is a tremendous opportunity in rural India and with the country¶s

GDP poised to grow at 8% plus over the next few years, HDFC Bank is
well-positioned to tap this opportunity for rapid growth.

There are agricultural reforms taking place, supply-chains are being

developed and improved, per capita income is increasing and ancillary
units are growing around manufacturing. All this makes HDFC Bank
optimistic about its, and the country¶s financial sector¶s, growth going
forward.

The bank has a healthy footprint across the country, thanks to its past
acquisitions, beginning with Times Bank in the late-1990s.

c
 c

Besides, we have laid a great deal of emphasis on our asset quality -- it

has never been in distress and our NPA levels are very low,´ Puri said.

On fund-raising, he said it is not on the immediate horizon. ³We have a

capital adequacy ratio of over 16 % there is no need for us to raise funds
immediately,´ Puri said.

c
c
Housing Development and Finance Corporation provides loan for tractors
such as 25 HP tractors, 35 HP-50 HP tractors which is used for agricultural
as well as commercial purposes.

Basic Features of HDFC Agriculture Loan:

1. The huge range of tractors which are manufactured in India is financed

by HDFC Bank.
2. Offers low rate of interest to the farmers.
3. Provides loan up to 85% of the value of the tractors.
4. Flexibility in repayment periods which ranges from 12-84 months.
5. Minimum documentation is required

The Eligibility criteria for the farmers are:

1. Minimum age of the applicant to apply for the loan is 18 years and
maximum 60 years.
2. To avail HDFC Agriculture Loan Annual Income of the farmer should not
be less than 1 Lac.
3. To avail HDFC loan should possess 5 acres of cultivated land or 10
acres of un-cultivated land.

Documents required are:

1. Identity proof, which can be a Voter ID card, Driving license, xerox of
the first page of the Bank Pass book where details of customers name,
address and photograph is duly attested by the Bank etc.
2. Address proof- Ration card, Property card etc are required.
3. Bank Statement- Bank statement for last 6 months is required in
certain cases.
4. Signature proof- signature proof is required for the customer to avail
HDFC Agriculture Loan.

c
 c

warious Charges:
In case of tractors various charges such as Pre-payment Charges (4% is
charged by HDFC Bank if the tractor is delivered before 12 months and
2% if it is delivered after 12 months), penalty charges of 2% in case of
late payments, charges against bouncing of cheques, documentation
charges, processing fees etc.

Hence to avail HDFC Agriculture Loan the basic requirements are needed.

HDFC Bank

Agri Finance as Business Line;

Agricultural production in India depends upon millions of small farmers.

However, because of inadequate financial resources, many farmers are
unable to receive improved seeds and fertilizers, nor introduce better
methods and techniques. It is, therefore, of the utmost importance that
the financial requirements of farmers are adequately met. The provision
of sufficient and timely credit at fair rates of interest has to be considered
as an integral part of agricultural development. Agricultural activities in
India are seasonal; carried out during certain period which results in
variable demand for savings and credit, uneven cash flow and lags
between loan disbursal and repayments.

HDFC Bank through its expanding network of branches in rural area s

and pre and post harvest product range covering the agri value chain is
well positioned to cater to the requirements of the individual farmer as
well as to that of small to large agri based industries / processors.

Strategic Role and Focus;

Pre and Post Harvest Agri lending, is a key focus area for the bank to
sustain its rural branches and generate liability and other businesses from
the area. Business is chanalised through branches, direct sales teams.
Tie ups with existing players in these markets such as Large Processors,
Dairies, Fertiliser Company s, Retailers is another key initiative to drive
a combined value proposition to the agri customers more
efficiently.Business correspondent, business facilitator models are in place
across a cross section of individuals, co-operatives and corporates to

c
 c

increase our distribution and reach to the farmers

Products and Services;

HDFC Bank offers a host of products & services under the Agri umbrella:

a) Agri loan to individual farmer - The Kisan Gold Card is aimed at

meeting the production and investment needs of the farming community.
Production needs broadly cover crop production requirements, including
funds for all related inputs to grow a crop. Kisan Gold Card also meet Post
Harvest and Domestic consumption requirements of the farmer. We also
offer specific loans for Horticulture in various states

b) Term Loans ± Term loans are offered to support investment in Farm

Equipment, Farm Development, Irrigation and godown construction.

c) Pledge based Agri financing (Warehouse Receipt Finance) ± Post

Harvest finance in the form of Warehouse Receipts is offered for various
agricultural commodities across a cross section of warehouses, godowns,
cold storages and open stocking. Through a network of collateral
managers and our own surveillance team we are one of the pioneers and
market leaders in this business in the
country_____________________________________________________
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It will also focus on organic growth, having completed the acquisition of Centurion Bank of Punjab which has given it a
strong pan-India footprint says managing director Aditya Puri, HDFC Bank

Mumbai: Private sector HDFC Bank aims to ride the growth opportunities
thrown up by the increasing affluence of rural India to grow at a faster
pace than the industry average over the next few years, a top bank
official said.

The bank will also focus on organic growth, having completed the
acquisition of Centurion Bank of Punjab (CBoP) a couple of years ago,
which has given it a strong pan-India footprint, he said.

³There is a tremendous opportunity in rural India and with the country¶s

GDP poised to grow at 8% plus over the next few years, HDFC Bank is
well-positioned to tap this opportunity for rapid growth,´ managing
director Aditya Puri said.

Describing rural India as ³Bharat´, Puri said that HDFC Bank is well-poised
to exploit the growth opportunities here in terms of both products and
branches.

³Bharat is growing rapidly there are agricultural reforms taking place,

supply-chains are being developed and improved, per capita income is
increasing and ancillary units are growing around manufacturing. All this
makes HDFC Bank optimistic about its, and the country¶s financial
sector¶s, growth going forward,´ Puri said.

The bank constantly innovates and comes up with new offerings, he said,
citing the example of its loans against gold jewellery facility.

³Now we give loans against gold jewellery, which helps us tap business
from small shop-keepers, small businesses and others in rural areas. This
business is a good one in the interiors of the country,´ the HDFC Bank
chief said.

HDFC Bank¶s strategy presently is to grow organically and ³we have the
ability to achieve our future growth targets organically,´ Puri said.

c
c

³There is no necessity for any acquisition now,´ he said in reply to a

specific question on the issue.

The bank has a healthy footprint across the country, thanks to its past
acquisitions, beginning with Times Bank in the late-1990s.

³The acquisition of Centurion Bank of Punjab (CBoP) gives us a footprint

in the South, as well as the North. We are anyway strong in the West,´ he
said.

CBoP itself is an amalgamation of Lord Krishna Bank (South) and Bank of

Punjab (North).

³Besides, we have laid a great deal of emphasis on our asset quality -- it

has never been in distress and our NPA levels are very low,´ Puri said.

On fund-raising, he said it is not on the immediate horizon. ³We have a

capital adequacy ratio of over 16 % there is no need for us to raise funds
immediately,´ Puri said.

c
c
Housing Development and Finance Corporation (HDFC) provides loan for
tractors such as 25 HP tractors, 35 HP-50 HP tractors which is used for
agricultural as well as commercial purposes.

Basic Features of HDFC Agriculture Loan:

1. The huge range of tractors which are manufactured in India is financed

by HDFC Bank.
2. Offers low rate of interest to the farmers.
3. Provides loan up to 85% of the value of the tractors.
4. Flexibility in repayment periods which ranges from 12-84 months.
5. Minimum documentation is required

The Eligibility criteria for the farmers are:

1. Minimum age of the applicant to apply for the loan is 18 years and
maximum 60 years.
2. To avail HDFC Agriculture Loan Annual Income of the farmer should not
be less than 1 Lac.
3. To avail HDFC loan should possess 5 acres of cultivated land or 10
acres of un-cultivated land.

c
c

Documents required are:

1. Identity proof, which can be a Voter ID card, Driving license, xerox of
the first page of the Bank Pass book where details of customers name,
address and photograph is duly attested by the Bank etc.
2. Address proof- Ration card, Property card etc are required.
3. Bank Statement- Bank statement for last 6 months is required in
certain cases.
4. Signature proof- signature proof is required for the customer to avail
HDFC Agriculture Loan.

warious Charges:
In case of tractors various charges such as Pre-payment Charges (4% is
charged by HDFC Bank if the tractor is delivered before 12 months and
2% if it is delivered after 12 months), penalty charges of 2% in case of
late payments, charges against bouncing of cheques, documentation
charges, processing fees etc.

Hence to avail HDFC Agriculture Loan the basic requirements are needed.

HDFC Bank

Agri Finance as Business Line;

Agricultural production in India depends upon millions of small farmers.

However, because of inadequate financial resources, many farmers are
unable to receive improved seeds and fertilizers, nor introduce better
methods and techniques. It is, therefore, of the utmost importance that
the financial requirements of farmers are adequately met. The provision
of sufficient and timely credit at fair rates of interest has to be considered
as an integral part of agricultural development. Agricultural activities in
India are seasonal; carried out during certain period which results in
variable demand for savings and credit, uneven cash flow and lags
between loan disbursal and repayments.

HDFC Bank through its expanding network of branches in rural area s

and pre and post harvest product range covering the agri value chain is
well positioned to cater to the requirements of the individual farmer as
well as to that of small to large agri based industries / processors.

c
c

Strategic Role and Focus;

Pre and Post Harvest Agri lending, is a key focus area for the bank to
sustain its rural branches and generate liability and other businesses from
the area. Business is chanalised through branches, direct sales teams.
Tie ups with existing players in these markets such as Large Processors,
Dairies, Fertiliser Company s, Retailers is another key initiative to drive
a combined value proposition to the agri customers more
efficiently.Business correspondent, business facilitator models are in place
across a cross section of individuals, co-operatives and corporates to
increase our distribution and reach to the farmers

Products and Services;

HDFC Bank offers a host of products & services under the Agri umbrella:

a) Agri loan to individual farmer - The Kisan Gold Card is aimed at

meeting the production and investment needs of the farming community.
Production needs broadly cover crop production requirements, including
funds for all related inputs to grow a crop. Kisan Gold Card also meet Post
Harvest and Domestic consumption requirements of the farmer. We also
offer specific loans for Horticulture in various states

b) Term Loans ± Term loans are offered to support investment in Farm

Equipment, Farm Development, Irrigation and godown construction.

c) Pledge based Agri financing (Warehouse Receipt Finance) ± Post

Harvest finance in the form of Warehouse Receipts is offered for various
agricultural commodities across a cross section of warehouses, godowns,
cold storages and open stocking. Through a network of collateral
managers and our own surveillance team we are one of the pioneers and
market leaders in this business in the
country_____________________________________________________
_____


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