The Warehousing Development and Regulatory Authority (WDRA) under the Department of Food and Public Distribution (DFPD) on its 13th Foundation Day held a seminar on the “Role of Financial Institutions in Promoting e-NWR based Pledge Finance” on 01.11.2023 at the India Habitat Centre, New Delhi. Shri Sanjeev Chopra, Secretary, Department of Food and Public Distribution (DFPD) graced the occasion as Chief Guest.
Delivering his address, Shri Chopra said that India was poised to become the 3rd largest economy in the coming years and that WDRA would play a critical role in the growth of the logistics and warehousing sector which comprises 15% of the GDP and is growing at a CAGR of 16% per annum. Pledge finance against fictitious receipts and sub-standard goods cause losses. WDRA was formed to promote scientific storage and issuance of electronic- negotiable warehouse receipt (e-NWR) in the country and only WDRA registered warehouses can issue e-NWR. WDRA has registered more than 4800 warehouses so far, loaning against e-NWR crossed more than Rs. 2400 crore in 2022-23 and there is ample scope for growth in both. He further highlighted the many measures that WDRA has taken to encourage the development of the warehousing sector. These include waiver of application fee and renewal fee for 2 years, cost of inspection of warehouses being borne by the government and reduction in the net worth requirement for warehousemen. Rationalization of dynamic security deposit, amendment of the W(D&R) Act and credit guarantee fund are on the anvil. He lauded FCI
and MPWLC that have made WDRA’s registration mandatory. An important measure, according to Shri Chopra could be the Digital Gateway. This platform will bring the repositories, warehouseman, bankers and depositors on to a single platform and will greatly ease the process of pledge finance against e-NWR. He further mentioned the Common Service Centres, which are available across the country that can facilitate farmers in using this platform for lending against e-NWR. He also talked about the possibility that crop loans which are lent under the KCC programme should be linked with pledge finance against e-NWR. With this process, the interest burden will come down for farmers and bankers and this would be a win-win situation for all stakeholders.
Earlier, Shri T K Manoj Kumar, Chairperson, WDRA in his address highlighted the significant improvement in WDRA’s performance metrics, WDRA’s efforts to rationalize the regulatory burden on stakeholders and the measures to consolidate WDRA’ gains for future growth. He emphasized that the singular problem is that WDRA’s registration is not mandatory except for the warehouses intending to issue Negotiable Warehouse Receipts. To increase registration, WDRA is dependent upon its outreach programmes and the directives given by other bodies like State Governments, etc. He appreciated the decision taken by FCI and MPWLC to store their procured stocks in WDRA registered warehouses and requested other agencies to take similar steps which would increase WDRA’s registration and contribute to reduction of storage loss. Chairman, WDRA also mentioned the slew of measures that WDRA has taken to rationalize the regulatory burden on its various stakeholders. Apart from waiver of fee and rationalization of net worth, this also includes the introduction of a new insurance regime and the enabling of registration of entities having negative net worth formed by an Act of Parliament or state legislature if they furnished indemnity bonds.
Further, to increase the e-NWR based pledge finance, WDRA had gone on an intense drive to contact banks directly, and persuade them to give loans only against e-NWRs. In consonance, SBI signed an MoU with WDRA and brought out a special product for loaning against e- NWRs for priority sector lending with many concessionary features. The support of public and private sector banks, state governments and the Government of India would greatly help WDRA in achieving greater pledge finance against e-NWRs, increasing liquidity in rural areas and helping to increase farmers’ income. Shri Kumar also mentioned that WDRA was on the verge of registering non-agri warehouses and upgrading its digital framework. All these measures would serve to increase registration and pledge finance against e-NWR.
Shri Dheeraj Sahu, Joint Secretary, WDRA in his welcome address exhibited the progress made by WDRA in the last one year which was at an all-time high across several major activities. WDRA registered 1522 warehouses and this is an increase of 150% of the registration done in the previous financial year. He further highlighted that pledge finance against e-NWR went up to Rs. 2,442 crores, a rise of 64% over the previous year.
Shri Sahu talked about WDRA’s expanding outreach activities which included MoUs with 12 Agriculture Universities for awareness programmes. MoUs for improving pledge financing against e-NWR were also signed with the State Bank of India (SBI) and the Punjab National Bank (PNB). In the past year, a conference with commercial banks was held in Mumbai and with regional rural banks was held in New Delhi. For ease of doing business, WDRA took several steps for making registration easier for its stakeholders. These developments mark important steps in strengthening the system of Negotiable Warehouse Receipts in the country and several other measures are under way.
A film on the various aspects and SOPs of scientific storage and pest control for warehouses registered by WDRA was launched and screened before the audience. It is a part of WDRA’s training initiatives and shall be previewed in farmers’ awareness programmes, etc.
A brief presentation explaining the e-NWR and Pledge Finance ecosystem was also made. The presentation covered the benefits of WDRA registration, an overview of the agricultural credit scenario in India, the price movement of various commodities, challenges in post- harvest finance and agricultural marketing, possible solutions for increasing e-NWR based pledge finance, the recent changes in WDRA’s regulations and the road ahead.
A panel discussion followed by open house was held. Shri Mukesh Kumar Jain, Member, WDRA moderated the session and the panelists included Shri Shantanu Chandrakant Pendsey, CGM, SBI, Shri Sunil Kumar Chug, CGM, PNB, Shri BS Sivakumar, President, Kotak Mahindra Bank, Shri Lokendra Tomar, Product Head, ICICI, Shri Omkar Reddy, MD, APSWC and Shri Jayant Chaudhary, Proprietor, Jayant Chaudhary Warehouse. Many salient points related to the challenges and probable solutions in increasing pledge finance against e- NWR were enumerated.
On this momentous occasion, a felicitation ceremony was also held. Central Warehousing Corporation, state warehousing corporations, public and private sector banks, marketing boards, cooperative societies and warehousemen were awarded in recognition of their role in promoting pledge finance against e-NWR throughout the country.
The vote of thanks was given by Shri Jeetesh Sharma, Director (A&F), WDRA who thanked the Secretary, DFPD for gracing the occasion and the august gathering for promoting pledge finance against e-NWR.
The conference was well attended by representatives from government organizations, state warehousing corporations, regulatory bodies, banking sector, inspection agencies, industry associations, repositories, media and the warehousing industry.