Objective

The main objective of the land development bank is to promote the development of agriculture and increase the agricultural production. The CLDBs provide long-term finance to PLDBs affiliated to them or finance directly through their branches.

Structure

These Banks have two-tier structure

1. Primary Land Development Bank at district level with branches at taluka level.

2. State Land Development Bank. All primary Land Development Banks are federated into Central Land Development Bank at the State Level. In some States, there is “Unitary structure” wherein, there is only one State Land Development Bank at the state level operating through its branches and sub-branches at district and below levels.

Primary Land Development Banks (PLDB)

These banks were originally organized to cover one or a few taluks in the district. At present they are eligible to cover one development block. All land owners are eligible to become members and borrow funds by mortgaging their land. The principal borrower is enrolled as ‘A’ class member and others who have interest in the mortgaged property are admitted as ‘B’ class members.

Central Land Development Bank (CLDB)

These members of the CLDBs are the PLDBs and a few individual promoters. It grants long-term loans to agriculturists through the PLDBs and branches of CLDBs. It raises funds through floating debentures, which are guaranteed by the State Government. When PLDB obtains loan from the CLDB, it assigns the mortgage deeds obtained from the borrowers to the CLDB. The CLDB floats debentures and raises funds against the security of these properties. The NABARD and LIC subscribe for the debentures in large amounts and the former also extends refinance assistance to LDBs.