Current Affairs: Passage of the Day - 20 February 2025 | Current Affairs & General Knowledge - CLAT PDF Download

Directions: Read the passage carefully and answer the questions that follow.
National e-Repository expects the Government move to allocate ₹1,000 crore towards Credit Guarantee Scheme for e-NWR (electronic-Negotiable Warehouse Receipts) based Pledge Financing to be a game changer in adoption of warehouse receipts and post-hard credit finance in agriculture market.
This apart, the Government under the Digital India Mission has launched e-Kisan Upaj Nidhi (e-KUN) program that enables farmers to access low-interest loans through electronic Negotiable Warehouse Receipts (e-NWRs). The program not only empowers farmers, but also shields them from distress selling.
NeRL, the largest e-NWR issuer with a market share of 88 per cent, expects more warehouses to register with Warehouse Development and Regulatory Authority and register with it for issuing e-NWRs.
The agriculture industry has about one lakh warehouses in the country and of this 40,000 are public warehouses. WDRA has managed to register 5,000 odd warehouses. Among them, about 2,500 are registered with a NeRL or with competing Countrywide Commodity Repository to issue e-NWR.
Saurabh Khanna, Managing Director and CEO, NeRL, told businessline that the adoption of e-NWR has got a major push from the Government after announcement of ₹1,000 crore credit guarantee scheme and e-KUN.
RBI has also enhanced the Priority Sector Lending limit for e-NWRs from ₹50 lakh to ₹75 lakh. However, NeRL has made a representation to RBI for further enhancing it to ₹2 crore for farmer producer organisations and ₹4 crore for traders, he said as last changes were done a couple of years back.
NeRL alone has facilitated loans worth ₹10,000 crore against e-NWR through banks and the NPA cases seen by banks are hardly few. In fact, he said RBI should consider shifting all pledge finance lending against warehouse receipts through e-NWR.
The finance availed through e-NWR issued by NeRL is expected to increase 33 per cent to ₹4,000 crore this fiscal from ₹3,000 crore last fiscal.
The government is making various initiatives and expects lending through e-NWR based pledge finance to touch ₹1 lakh crore in next 10 years, he said.
The company’s operations are largely in Gujarat, Rajasthan, Madhya Pradesh, Maharashtra, Tamil Nadu, Andhra Pradesh and Telangana and will keep investing resources in other states in the coming year.
NCDEX recently reduced its ownership in NeRL to 51 per cent due to regulatory push, with other major shareholders being NABARD, ICICI and SBI.
NeRL earns 40 per cent of its revenue from the transactions done by Exchange depositors although volume-wise it accounts for only 1.5 lakh tonne while non-NCDEX clients account for 8.5 lakh tonne of volume handled in the first 9 months of FY25.
[Excerpt from TH "Credit Guarantee Scheme for e-NWRs" Dated 20/02/25]

Q1: What is the purpose of the ₹1,000 crore allocation for the Credit Guarantee Scheme for e-NWRs?
(a) To provide subsidies for fertilizers
(b) To improve agricultural financing and credit access for farmers
(c) To construct new warehouses across India
(d) To promote organic farming

View Answer  

Ans: (b)
Sol: The ₹1,000 crore allocation aims to improve credit access for farmers through e-NWR-based financing.

Q2: What does e-NWR stand for?
(a) Electronic National Water Resources
(b) Electronic Negotiable Warehouse Receipts
(c) Enhanced Natural Wheat Reserves
(d) Economic Nutrient Wealth Records

View Answer  

Ans: (b)
Sol: e-NWRs are digital documents representing ownership of goods stored in warehouses.

Q3: How do e-NWRs benefit farmers?
(a) They provide farmers with ownership of new warehouses
(b) They allow farmers to pledge stored goods to secure loans
(c) They eliminate the need for fertilizers
(d) They guarantee fixed crop prices

View Answer  

Ans: (b)
Sol: e-NWRs enable farmers to use their stored produce as collateral for loans.

Q4: What is the role of the National e-Repository Limited (NeRL) in e-NWR issuance?
(a) It manages the registration of all warehouses
(b) It is the largest issuer of e-NWRs in India
(c) It provides weather forecasting for farmers
(d) It distributes direct cash benefits to farmers

View Answer  

Ans: (b)
Sol: NeRL holds an 88% market share in issuing e-NWRs in India.

Q5: How much loan coverage is provided under the Credit Guarantee Scheme for e-NWR financing?
(a) ₹10 lakh for individuals and ₹50 lakh for farmer groups
(b) ₹75 lakh for agricultural purposes and ₹2 crore for farmer producer organizations
(c) ₹1 crore for all farmers
(d) ₹5 lakh for individual farmers and ₹10 lakh for farmer groups

View Answer  

Ans: (b)
Sol: The scheme provides loans up to ₹75 lakh for individual farmers and ₹2 crore for farmer producer organizations.