Land development bank
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A land development bank (Bengali: ভূমি উন্নয়ন ব্যাংক), abbreviated LDB, is a special kind of bank in India, and is of quasi-commercial type that provides services such as accepting deposits, making business loans, and offering basic investment products. The main objective of the LDB is to promote the development of land, agriculture and increase the agricultural production. The LDB provides long-term finance to members directly through its branches.
The first Land Development Bank was started at Jhang in Punjab in 1920. Even though the first LDB was started in Punjab, the real progress began when the land development bank was established in Chennai in 1929. Without it, land banks, land mortgage banks, agriculture banks, agriculture development banks are now called land development banks in modern world.
There are different kinds of functions of land development banks in world. They also differ from one another in their bye-laws or constitutions. Some are organized on a state basis, some on a co-operative basis and some on a private basis, incorporating joint stock principles.
The sources of funds of land development banks are:
- Share capital
- Deposits from members or non-members
- Issue of debentures
- Accepting deposits
- Reimbursements of subsidies from the government
- Other funds
Loans and advances
Land development bank provides long-term funds for various agriculture related projects besides development of land and business. The borrowing capacity of a member is generally determined according to the number of shares he holds in the bank. The loans granted by land development bank is repayable within 20 to 30 years. Normally, loans are granted up to 50% of the value of the land or up to 30 times the revenue. Loans are granted only after a thorough verification of security title-deeds as well as the necessity for the loan. The rates of interest for LT loans are generally low and within the paying capacity of farmers. They are around 11 to 12%.
- Progoti Co-operative Land Development Bank Limited
- National Co-operative Agriculture & Rural Development Banks Federation Limited
- Orissa Provincial Co-operative Land Mortgage Bank Limited
- Delta Land Development Limited
- Land and Agricultural Development Bank of South Africa
Kerala State Co Operative Agricultural and Rural Development Bank (KSCARDB)