A SYNOPSIS ON

“AGRICULTURE INSURANCE IN INDIA”

AT
“HDFC BANK LIMITED”
BY
D. PETERSON
(HALL TICKET NO: 2129-21-672-115)
Synopsis for project to be submitted for the award
of the degree of
MASTER OF BUSINESS ADMINISTRATION
OSMANIA UNIVERSITY

2021-2023

AURORA’PG COLLEGE, NAMPALLY

1.1 INTRODUCTION

Agricultural insurance in India is an examination of credit to farm borrowers for the financing

and liquidity services. It is also regarded as studying those financial intermediaries who

provide the financial markets and agriculture with loan funding where those intermediaries

receive their loan capable funds. "Agricultural financing is just as important as other inputs

for agricultural production. Only if the farmers have money (funds) can technical inputs be

bought and used. Yet his own money is always insufficient and he needs money or credit

outside of it. Capitalizing farmers into new investment and/or adoption of new technologies is

farm finance. The significance of agricultural credit is further strengthened by the unique role

of Indian agriculture and its important role in alleviating poverty in the macroeconomic

framework. Since the start of the planned development era in India, the emphasis on the

institutional framework for agricultural credit is stressed in recognition of the importance of

agricultural credit in promoting agricultural growth and development. It aims to address and

assess the development of India's history and need for agricultural funding, sources and

magnitude of Agricultural insurance in india.

Until 1935, the money lenders had been farming the only source of credit. They used to

charge excessively high interest rates and follow severe practices while lending and

recovering. As a result, farmers had to pay heavy debts and many of them continued debt. By

the Reserve Bank of India Act of 1934 the Central Co-op of District. Agricultural lending and

improved agricultural lending have received momentum as well as the Bank's Act and Land

Development Banks Act. There was created a powerful alternative agency. A large credit was

easily available in terms of both granting and recovery loans at reasonable interest rates.

While the co-operative banks began financing agriculture in 1930 with their establishments,

the real impetus came only after the Independence, when appropriate legislation and policies
had been enacted. Then, by opening branches in rural areas and drawing deposits, bank

lending to agriculture has made phenomenal progress.

HISTORY OF FINANCING AGRICULTURE IN INDIA

Until 1935, the money lenders had been farming the only source of credit. They used to

charge excessively high interest rates and follow severe practices while lending and

recovering. As a result, farmers had to pay heavy debts and many of them continued debt.

The Reserve Bank of India Act 1934 was adopted.

Central Co-op District. Agricultural lending and improved agricultural lending have received

momentum as well as the Bank's Act and Land Development Banks Act. There was created a

powerful alternative agency. A large credit was easily available in terms of both granting and

recovery loans at reasonable interest rates. Though the co‐operative banks began financing

their farmers in the 1930s, their real impetus was only received after independence, when

appropriate legislation had been adopted and policies had been drawn up. Then, by opening

branches in rural areas and drawing deposits, bank lending to agriculture has made

phenomenal progress. Until 14 major trade banks were nationalized in 1969, the major

financial agencies for agriculture were cooperative banks. Following nationalization, the

banks were required to provide financing as a priority to agriculture. These banks have

conducted special branch expansion programs and have created a nationwide banking service

network and have begun large-funding of agriculture. Thus, the credit for agriculture has

become multi-. New technologies and financing available are being developed and adopted

together The farmers ' short-and long term needs are met by a wide number of formal

agencies, such as Cooperatives, Regional Rural Banks (RRBs), Scheduled Commercial

Banks and Non Banking Financiers (NBFIs) as well as Self-Help Groups (SHGs). Several

initiatives were taken to strengthen the rural credit system institutional mechanism. The
White Revolution and the Yellow Revolution have played a crucial role in bringing "Green

Revolution" finance. The share of commercial banks in total agricultural loans increased

dramatically during the first half of the 2000s In the 1990s there was a growing share of

short-farm credit in total farm loans. To ensure easy access to credit, new credit delivery

systems have been introduced in the form of Kisan Credit Card (KCC). The procedures and

loan amounts have been standardized for various purposes. "Crop loans" (Short-term credit)

have the biggest share of the diverse purposes. Farmer farmers also have loans to buy electric

motors with pumps, tractors and other equipment, digging wells, pike lines,

irrigation, fruits orchards planted, dairy animals and their feed, poultry and cattle farming,

and for many more allies. Furthermore, farmers are awarded loans for pumps and tractors.

The flow of ground level credit increased dramatically in the 12-year period from 2000-to

2011-, in particular after the' doubling' period (2004-), showing nearly ten times more In the

next five years of FYP XIII, another Rs35 to 42,000 lakh crore has been paid (12th Five Year

Plan Estimates) in the amount of roughly Rs 28 lakh crore. Agricultural credit has obviously

come to be an important strategy for accelerating farm investment.The PM-KISAN Scheme

was introduced to provide financial support to farmers. Under this scheme, the government

offers Rs 6,000 every year in three instalments of Rs 2,000 each to over 14.5 crore farmers

across India.
Highlights of the scheme

 There will be a uniform premium of only 2% to be paid by farmers for all Kharif

crops and 1.5% for all Rabi crops. In case of annual commercial and horticultural

crops, the premium to be paid by farmers will be only 5%. The premium rates to be

paid by farmers are very low and balance premium will be paid by the Government to

provide full insured amount to the farmers against crop loss on account of natural

calamities.

 There is no upper limit on Government subsidy. Even if balance premium is 90%, it

will be borne by the Government.

 Earlier, there was a provision of capping the premium rate which resulted in low

claims being paid to farmers. This capping was done to limit Government outgo on

the premium subsidy. This capping has now been removed and farmers will get claim

against full sum insured without any reduction.

 The use of technology will be encouraged to a great extent. Smart phones will be used

to capture and upload data of crop cutting to reduce the delays in claim payment to

farmers. Remote sensing will be used to reduce the number of crop cutting

experiments.

 PMFBY is a replacement scheme of NAIS / MNAIS, there will be exemption from

Service Tax liability of all the services involved in the implementation of the scheme.

It is estimated that the new scheme will ensure about 75-80 per cent of subsidy for the

farmers in insurance premium.

Farmers to be covered

All farmers growing notified crops in a notified area during the season who have insurable

interest in the crop are eligible. To address the demand of farmers, the scheme has been

made voluntary for all farmers from Kharif 2020. Earlier to Kharif 2020, the enrollment

under the scheme was compulsory for following categories of farmers:

 Farmers in the notified area who possess a Crop Loan account/KCC account (called

as Loanee Farmers) to whom credit limit is sanctioned/renewed for the notified crop

during the crop season. and

 Such other farmers whom the Government may decide to include from time to

time.Voluntary coverage: Voluntary coverage may be obtained by all farmers not

covered above, including Crop KCC/Crop Loan Account holders whose credit limit is

not renewed.

Risks covered under the scheme

Yield Losses (standing crops, on notified area basis). Comprehensive risk insurance is

provided to cover yield losses due to non-preventable risks, such as Natural Fire and

Lightning, Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado. Risks due to

Flood, Inundation and Landslide, Drought, Dry spells, Pests/ Diseases also will be covered.

In cases where majority of the insured farmers of a notified area, having intent to sow/plant

and incurred expenditure for the purpose, are prevented from sowing/planting the insured

crop due to adverse weather conditions, shall be eligible for indemnity claims upto a

maximum of 25 per cent of the sum-insured.

In post-harvest losses, coverage will be available up to a maximum period of 14 days from

harvesting for those crops which are kept in “cut & spread” condition to dry in the field.
For certain localized problems, Loss / damage resulting from occurrence of identified

localized risks like hailstorm, landslide, and Inundation affecting isolated farms in the

notified area would also be covered.

Statement of problem

The Scheme shall be implemented on an ‘Area Approach basis’ i.e., Defined Areas for each

notified crop for widespread calamities with the assumption that all the insured farmers, in a

Unit of Insurance, to be defined as "Notified Area‟ for a crop, face similar risk exposures,

incur to a large extent, identical cost of production per hectare, earn comparable farm income

per hectare, and experience similar extent of crop loss due to the operation of an insured peril,

in the notified area.

Defined Area (i.e., unit area of insurance) is Village/Village Panchayat level by whatsoever

name these areas may be called for major crops and for other crops it may be a unit of size

above the level of Village/Village Panchayat. In due course of time, the Unit of Insurance can

be a Geo-Fenced/Geo-mapped region having homogenous Risk Profile for the notified crop.

For Risks of Localised calamities and Post-Harvest losses on account of defined peril, the

Unit of Insurance for loss assessment shall be the affected insured field of the individual

farmer.

NATURE OF STUDY

 To provide insurance coverage and financial support to the farmers in the event of

failure of any of the notified crop as a result of natural calamities, pests & diseases.

 To stabilise the income of farmers to ensure their continuance in farming.

 To encourage farmers to adopt innovative and modern agricultural practices.

 To ensure flow of credit to the agriculture sector.

1.2 NEED OF THE STUDY

Agriculture insurance assumes vital and significant importance in the agro – socio –

economic development of the country both at macro and micro level.It is playing a catalytic

role in strengthening the farm business and augmenting the productivity of scarce resources.

When newly developed potential seeds are combined with purchased inputs like fertilizers &

plant protection chemicals in appropriate / requisite proportions will result in higher

productivity.Use of new technological inputs purchased through farm insurance helps to

increase the agricultural productivity.Accretion to in farm assets and farm supporting

infrastructure provided by large scale financial investment activities results in increased farm

income levels leading to increased standard of living of rural masses.

.1.3 SCOPE OF THE STUDY

In India, traditionally risk would be managed either privately or through implicit contracts

within the family or network (caste groups/extended families/joint families). Such contracts

can be quite useful to handle non covariant risks. However, yield risks are often locally

covariant, implying that these traditional contracts within village and families would not

perform well to insurance against yield risks. Another form of risk coping strategy among

farmers is income diversification/crop diversification that will reduce variance of their

income. If benefits of reduced risk exposure from such crop diversification are large, then

farmers may be willing to forego some of the possible gains from trade/specialization; that is

they would diversify crop rather than specialize in the activities in which they have a

comparative advantage. This strategy is may seems optimal from individual point of view,

but it may undermine the competitive advantage of a nation through specialization that

hinders national development. Productivity labour would likely increase under specialization.

Also, agricultural research could focus on fewer products and thereby increase its

effectiveness in developing new technologies. A Project Of 45 Days

1.4 OBJECTIVES OF THE STUDY

 To study the growth and development of National Agricultural Insurance Scheme.

 To examine the important features, trends and performance of National Agricultural

Insurance Scheme.

 To identify the remedies to make this scheme more effective.

 To analysis the farmers ability to repay their loans taken from HDFC BANK during
the time of crop failure
1.5 RESEARCH METHODOLOGY

RESEARCH:

Research is an art of scientific investigation. Research is defined as a “scientific and

systematic search for information on a specific topic”.The purpose of search is to discover

answers to questions through the application of scientific procedures.

METHODOLOGY:

The data used for analysis & interpretation is received from the responses of farmers for the

questionnaire. Comparison of response is used for interpreting the data.

The project is presented by using tables, column charts, with their interpretation. A survey is

undertaken to know the facts about the training.

AREA OF RESEARCH: Hyderabad

DATA COLLECTION:

The researcher has wide varieties of methods to consider either single or in combination they

were grouped first according to whether this use secondary or primary sources of data.

PRIMARY DATA:

Primary data has been framed through structured questionnaire. With the help of farmers who

are aware of PMFBY

SECONDARY DATA:

Data which is not originally collected rather obtained from published or unpublished sources,

is know as secondary data. It can be defined as data collected by someone else for purposes

other than solving the problems.Secondary data for the present study is retrieved from

company profile and text books.

RESEARCH INSTRUMENT:
The structural questionnaire with multiple choices.The data collected from the survey has

been tabulated and analyzed. The data is represented graphically by using column charts for

easy understand ability.

METHOD OF SAMPLING

The methodology used for this purpose is Survey and Questionnaire Method. It is a time

consuming and expensive method and requires more administrative planning and supervision.

It is also subjective to interviewer bias or distortion.

Sample Size:100 respondents

Sampling Unit: Businessmen, Government Servant, Retired Individuals

PERIOD OF STUDY

 A Project Of 45 Days

Survey Tools using in the study

Statistical Tools: MS-excel and pie and bar diagrams are used to analyze the data.
THEORTICAL FRAMEWORK

AGRICULTURAL INSURANCE:

Murray (1953) defined agricultural. finance as “an economic study of borrowing funds by

farmers, the organization and operation of farm lending agencies and of society’s interest in

credit for agriculture.”

Tandon and Dhondyal (1962) defined agricultural. finance “as a branch of agricultural

economics, which deals with and financial resources related to individual farm units.”

Nature and Scope:

Agricultural insurance can be dealt at both micro level and macro level. Macro- finance deals

with different sources of raising funds for agriculture as a whole in the economy. It is also

concerned with the lending procedure, rules, regulations, monitoring and controlling of

different agricultural credit institutions. Hence macro-finance is related to financing of

agriculture at aggregate level.

Micro-finance refers to financial management of the individual farm business units. And it is

concerned with the study as to how the individual farmer considers various sources of credit,

quantum of credit to be borrowed from each source and how he allocates the same among the

alternative uses with in the farm. It is also concerned with the future use of funds.

Therefore, macro-finance deals with the aspects relating to total credit needs of the

agricultural sector, the terms and conditions under which the credit is available and the

method of use of total credit for the development of agriculture, while micro-finance refers to

the financial management of individual farm business.

INSURANCE IN INDIA
Insurance in India started without any regulations in the nineteenth century. It was a typical

story of a colonial era: a few British insurance companies dominating the market serving

mostly large urban centers. After the independence, the Life Insurance Company was

nationalized in 1956, and then the general insurance business was nationalized in 1972. Only

in 1999 private insurance companies were allowed back into the business of insurance with a

maximum of 26 per cent of foreign holding (World Bank Economic Review 2000). The entry

of the State Bank of India with its proposal of bank assurance brings a new dynamics in the

game. On July 14, 2000 Insurance Regulatory and Development Authority bill was passed to

protect the interest of the policyholders from private and foreign players. The following

companies are entitled to do insurance business in India.

The private insurance joint ventures have collected the premium of Rs.1019.09 crore with the

investment of just Rs.3,000 crore in three years of liberalization. The private insurance

players have significantly improving their market share when compared to 50 years Old

Corporation (i.e.LIC). As per the figures compiled by IRDA, the Life Insurance Industry

recorded a total premium underwritten of Rs. 10,707.96 crore for the period under review. Of

this, private players contributed to Rs.1, 019.09 crore, accounting for 10 percent. Life

Insurance Corporation of India (LIC), the public sector giant, continued to lead with a

premium collection of Rs.9,688.87 crore, translating into a market share of 90 per cent. In

terms of number of policies and schemes sold, private sector accounted for only 3.77per cent

as compared to 96.23 per cent share of LIC (The Economic Times, 21 March, 2004).

The ICICI Prudential topped among the private players in terms of premium collection. It

recorded a premium of Rs. 364.9 crore and a market share of 25 per cent, followed by Birla

Sun Life with a premium under- written Rs.170 crore and a market share of 15 percent,

HDFC Standard with 132.7 crore and Max New York Life with Rs.76.8 crore with a market
share of approximately 15 per cent each. Unlike their counterpart in the life insurance

business, private non-life insurance companies have not yet started addressing the retail

market. All is set to change in the coming years. Like in the banking sector, non-life

insurance companies will soon have no choice but to focus on individual buyers.

In case of private non-life insurance players, that their market share rose to 14.13 per cent,

recording a growth of 70.75 per cent on an annual basis, while the market share of public

sector stood at 85.87 per cent, registering a marginal growth of 6.34 per cent. The overall

market has recorded a growth of 12.32 per cent by the end of January 2004. Among the

private non-life insurance players, ICICI Lombard topped the list with a premium collection

of Rs.403.62 crore in one year period with a market share of 3.05 per cent and with an annual

131.6 per cent, followed by ICICI BANK LIFE INSURANCE with a premium of Rs.385.02

crore and 2.91 per cent market share and Tata AIG with 300.49 crore premium and 2.27 per

cent market share with an annual growth rate of 62.60 per cent.
ARTICLE: 1

Title: Examined the crop insurance in India and the dependence.

Author:Gurudev Singh

Year:(2010)

Abstract:

Examined the crop insurance in India and the dependence of Indian agriculture on uncertain

risk. In addition the farmer‟s experience of other production and marketing risks relate to

different cropping patterns and for different agro climatic and areas. It also analysed the need

for crop insurance as an alternative to manage production risk. It discussed the presently

available crop insurance products for a particular crop and regions and also it discussed the

two important products namely National Agricultural Insurance Scheme and Weather Based

Insurance Schemes. The study conclude identifying some difficulties in the two major

insurance products.

Keywords: Agriculture, insurance, crops

ARTICLE: 2

Title: Studied The Demand For Agricultural Micro Insurance.

Author: Heenkenda.

Year:(2011)

Abstract:

studied the demand for agricultural micro insurance at Ampara district in Sri Lanka. This

study analysis the willingness to pay and willingness to join among the Sri Lankan farmers.

The study employed Probit Regression model for this analysis. It also observed production

expenditure and the age of the farmers play a significant role in the determining the decision

of farmers to join the scheme of micro insurance and also observed younger and more

educated farmers could likely to pay for the insurance product. The study suggests that a

strong support to launching Index Based Micro Insurance in Sri Lanka.

Keywords: production, insurance, farmers

ARTICLE: 3

Title: Farmer‟S Perception And Awareness Towards Crop Insurance.

Author: Suresh Kumar

Year:(2011)

Abstract:

Analyzed the farmer‟s perception and awareness towards crop insurance as a tool for risk

management in Tamilnadu. The study critically examined how the farmers perceive about

the risk mitigation measures provided by the Government and about their awareness. The

study employed on Probit and Tobit model to analyse the awareness on crop insurance

schemes. This study also observed the loss assessment, which is totally unacceptable and

unpleasant to the farmers. The loss due to natural calamities is taken into account at Firkah

level and the individual losses are not at all considered. It concluded that the factors such as

gross cropped area, income other than agricultural source, presence of risk in farming number

of workers in the farm family, satisfaction with the premium rate and the affordability of the

insurance premium amount fount to be significantly and positively influence the adoption of

insurance and premium paid by the farmers.

Keywords: cropinsurance, premium, risk management

ARTICLE: 4

Title:Evaluation Of The Crop Insurance Programme In India.

Author: Nair, Rshmy

Year:(2012)

Abstract:

studied an evaluation of the crop insurance programme in India through the multi-peril yield

based National Agricultural Insurance Scheme. The coverage and indemnity payments are

biased towards a few regions and crops, and there are delays in settlement of claims and

while the emergence of weather-based insurance as an alternative has addressed several

limitations of traditional insurance, it is faced by challenges of a different kind. Both these

forms of insurance must thus be looked upon as complementary to each other in order to

evolve an efficient mechanism for dealing with natural disaster risks in agriculture.

Keywords: disaster risks, insurance, crops

ARTICLE: 5

Title: A Multi-Crop Insurance Model To Evaluate Crop Insurance.

Author: Woodard, Joshua D.

Year:(2013)

Abstract:

developed a multi-crop insurance model to evaluate crop insurance decisions when several

crops are produced. The results suggest that the diversification effects derived from

producing multiple crops can substantially alter the risk- reduction impacts of crop insurance

versus in the decision is vowed from the perspective of a

single crop. Further, the relatedness of crop production and price responses among crops

differs considerably across insurance products and strategies. As a result insurance strategies

that might provide the maximum risk reduction for an individual crop do not necessarily

carryover to the multi-crop case.

Keywords: insurance products, crops, risk reduction

ARTICLE: 6

Title: Crop Insurance in India: Key Issues and Way Forward

Authors: Ashok Gulati; PrernaTerway; Siraj Hussain
Year: February 2018
Abstract:
Farmers in India are exposed to large agriculture risks due to vagaries of nature. One of the
most effective mechanisms to mitigate agricultural risks is to have a robust insurance system.
Although crop insurance has been in the country since 1972, yet it has been beset with
several problems such as lack of transparency, high premium, delay in conducting crop
cutting experiments and non-payment/delayed payment of claims to farmers. Realizing the
limitations of existing system of crop insurance, a new crop insurance scheme was launched
on Baisakhi day, Pradhan Mantri FasalBima Yojana (PMFBY), from Kharif 2016. Although
the overall area insured has increased by a modest 6.5 percent (from 53.7 million ha in 2015-
16 to 57.2 million ha in 2016-17), the number of farmers insured has increased by 20.4
percent (from 47.5 million to 57.2 million), the sum insured has increased by 74 percent
(from Rs 115432.4 crore to 200618.9 crore), and premium paid has increased by 298 percent
(from Rs 5491.3 crore to Rs 21882 crore) over the same period. The scheme has faced several
challenges during its first year of implementation which pertain to extension of cut off dates
for registration resulting in high premium ratesthe first year of implementation of PMFBY
has not been very successful. This paper recommends use of high technology and JAM trinity
by linking land records of farmers with their Aadhaar numbers and bank accounts for
assessment and faster settlement of claims. A portal linking Core Banking Solution (CBS)
and crop insurance is need of the hour giving information on real time basis. India’s prowess
in Information Technology should come handy to achieve this.

Keywords: crop insurance, claims, high technology

ARTICLE:7

Title: Agriculture crop insurance policies in india –A Study on Pradhanmanthrifasalbima

yojana (PMFBY) in telangana state

Authors: Dr. Masani Srinivasulu Department of Public Administration & HRM Kakatya

University, Warangal – 506009

Abstract:

India is the seventh largest country in geographical level and second largest country in

population wise and twelfth largest country in economic wise. More than 70% of the

population has their livelihood as agriculture and agriculture oriented works either directly or

indirectly for their living. Over 600 million farmers are involved in agriculture related

activities. Mahatma Gandhi said "Indian economy lives in rural villages", and many of the

industries get their raw material from agriculture sector. Agricultural production therefore is

inherently a risky business and farmers face a variety of weather, pest, disease, input supply

and market related risks. Crop insurance programme whether for an advanced or a developing

country, cannot be designed without scarifying some of the preceding rigid requirements. The

government is relieved from large expenditures incurred for writing-off agricultural loans,

providing relief and distress loans etc., in the case of crop failure. The Policy resolution than

describe in detail the strategy and policy alternatives which are grouped under the following

heads: Sustainable agriculture, Food and nutrition security, Generation and transfer of

technology, Inputs management, Incentive for agriculture, Investment in agriculture,

Institutional structure and Risk management. In January earlier this year, in a move aimed at

reducing the recurrence of agricultural distress without having to effect hefty hikes in the

Minimum Support Prices (MSP), Narendra Modi led National Democratic Alliance

government had announced a crop insurance scheme named Pradhan Mantri FasalBima

Yojana (PMFBY). Under the new scheme being implemented from Kharif season of 2016,
the premium paid by farmers had been reduced to 2% of the insured value for the more rain-

dependent kharif crop and 1.5% for the rabi season, compared with 3.5-8% charged for the

two earlier schemes National Agricultural Insurance Scheme (NAIS) and Modified National

Agricultural Insurance Scheme (MNAIS). In the case of horticultural crops, farmers’

premium burden will be 5% of the sum assured or 50% of the total premium. Under the

PMFBY, there would be no upper limit on government subsidy provided by centre and state

governments. “Even if the balance premium (after farmers’ contribution) is 90%, it will be

borne by the government”.

Keywords: Agriculture, Crop Insurance, farmers, investment, PMFBY, risk

ARTICLE: 8

Title: Insurance Sector in India: Growth and Career Opportunities

Authors: Pooja JainNirmal International Education and Research Group, India

Sanjeev SethBusiness Press India

Year: 2019-12-23

Abstract:

Risks, the uncertainty about the future of something, be it be Business, Project, Life,

Property, or anything, has always been there and so is there the fear of not meeting the

intended goal for which they exist. Transferring the risk to a different party has been there as

a good strategy of risk handling. This strategy brought to us the concept of ‘Insurance’ in

which, the ‘Insurer’ assures the monetary coverage to the ‘Insurance owner’ in case the

‘Insured Artifact’ is adversely impacted under ‘Given Conditions’. Insurance has now grown

into a mature industry worldwide and in India it has many formal bodies regulating and

promoting it as a huge market.

This paper highlights some areas of the Insurance Market and its emerging future in India in

terms of economy and career opportunities.

Keywords: Insurance, Risk Cover, Industrial Growth

ARTICLE: 9

Title: Crop Insurance in India: Changes and Challenges

Author:Reshmy Nair Vol. 45, No.6(FEBRUARY 6-12, 2010), pp. 19-22 (4 pages)

Published By: Economic and Political Weekly

Abstract:

An evaluation of the crop insurance programme in India through the multi-peril yield-based

National Agricultural Insurance Scheme reveals that while it has done well on equity grounds, the

coverage and indemnity payments are biased towards a few regions and crops, and there are

delays in settlement of claims. And while the emergence of weather-based insurance as an

alternative has addressed several limitations of traditional insurance, it is faced by challenges of a

different kind. Both these forms of insurance must thus be looked upon as complementary to each

other in order to evolve an efficient mechanism for dealing with natural disaster risks in

agriculture.

Keywords: Agriculture, insurance, schemes

ARTICLE:10

Title: Weather Based Crop Insurance in India

Authors: Kolli N. Rao, Niraj Verma

Year: 20-04-2016
Abstract:
The weather index insurance market in India is the world's largest, having transitioned from
small-scale and scattered pilots to a large-scale weather based crop insurance program
covering more than 9 million farmers. This paper provides a critical overview of this market,
including a review of indices used for insurance purposes and a description and analysis of
common approaches to design and ratemaking. Products should be designed based on sound
agronomic principles and further investments are needed both in quantifying the level of
basis risk in existing products, and developing enhanced products with lower basis risk. In
addition to pure weather indexed products, hybrid products that combine both area yield and
weather indices seem promising, with the potential to combine the strengths of the individual
indices. A portfolio approach to pricing products, such as that offered by Empirical Bayes
Credibility Theory, can be significantly more efficient than the standalone pricing approaches
typically employed in the Indian market. Legislation for index insurance products, including
consumer protection legislation, should be further enhanced, for example by requiring
disclosure of claim payments that each product would have made in the last ten years. The
market structure for weather based crop insurance products could better reward long-term
development of improved product designs through product standardization, longer term
contracts, or separating the roles of product design and delivery.
Keywords: Bankruptcy and Resolution of Financial Distress, Insurance & Risk Mitigation,
Hazard Risk Management, Climate Change Economics, Debt Markets
 INDUSTRY PROFILE

A bank is a financial institution that accepts deposits and channels those deposits into

lending activities. Banks primarily provide financial services to customers while enriching

investors. Government restrictions on financial activities by banks vary over time and

location. Banks are important players in financial markets and offer services such as

investment funds and loans. In some countries such as Germany, banks have historically

owned major stakes in industrial corporations while in other countries such as the United

States banks are prohibited from owning non-financial companies. In Japan, banks are

usually the nexus of a cross-shareholding entity known as the keiretsu. In France,

bancassurance is prevalent, as most banks offer insurance services (and now real estate

services) to their clients.

Introduction

India’s banking sector is constantly growing. Since the turn of the century, there has been a

noticeable upsurge in transactions through ATMs, and also internet and mobile banking.

Following the passing of the Banking Laws (Amendment) Bill by the Indian Parliament in

2018, the landscape of the banking industry began to change. The bill allows the Reserve

Bank of India (RBI) to make final guidelines on issuing new licenses, which could lead to a

bigger number of banks in the country. Some banks have already received licenses from the

government, and the RBI's new norms will provide incentives to banks to spot bad loans and

take requisite action to keep rogue borrowers in check.

Over the next decade, the banking sector is projected to create up to two million new jobs,

driven by the efforts of the RBI and the Government of India to integrate financial services
into rural areas. Also, the traditional way of operations will slowly give way to modern

technology.

3.2 COMPANY PROFILE

HDFC Bank Ltd is a major Indian financial services company based in Mumbai. The Bank

is a publicly held banking company engaged in providing a wide range of banking and

financial services including commercial banking and treasury operations.

This Integrated Annual Report for 2021- 22 provides insight into the process followed by the

Bank as it endeavours to deliver on its purpose. It provides a holistic assessment of the

Bank’s financial and non-financial performance. It also outlines relevant information on the

Bank’s strategy, governance, risks and prospects to offer better insights into its activities and

progress. Reporting principles and framework The financial information presented in this

report is in line with the requirements of · The Companies Act, 2013 (including the rules

made thereunder) · The Companies (Accounting Standards) Rules, 2006 · The Securities and

Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,

2015 · The Banking Regulation Act, 1949 and other relevant RBI regulations The report has

been prepared in accordance with the framework prescribed by the International Integrated

Reporting Council (IIRC) and also contains disclosures as per the Global Reporting Initiative

(GRI) Standards: Comprehensive option, Task Force on Climate-related Financial

Disclosures (TCFD), Business Responsibility and Sustainability Report (BRSR) and United

Nations Sustainable Development Goals (UN SDGs). There are no restatements of

information provided in the integrated report during the reporting year. Howeverthe changes

in the GHG accounting methodology from FY21 are documented on pages 59-61. Materiality

and scope This report includes information which is material to all stakeholders of the Bank

and provides an overview of its business and related activities. The report discloses matters
that substantially impact or affect the Bank’s ability to create value and could influence

decisions of providers of financial capital. In FY19 we conducted a materiality assessment in

line with GRI requirements through consultations with internal and external stakeholders.

Subsequently, in FY21, we have refreshed our materiality study to consider emerging topics

of interest within the ESG domain. The GRI Content Index, which specifies the GRI

Standards and disclosures made under them in the Report, has been provided in this report.

Reporting boundary the non-financial information in this report covers the activities and

progress of the Bank on a standalone basis. It covers information pertaining to the period

from April 1, 2021 to March 31, 2022. Assurance statement the report has also been

externally assured by an independent third party, based on ISAE 3000 (Revised).

Responsibility statement thecontent of this report has been reviewed by the senior

management of the Bank, and reviewed and approved by the Board of Directors to ensure

accuracy, completeness and relevance of the information presented in line with the principles

and requirements of the International Integrated Reporting Framework. Governance over

integrated reporting process the2022 Integrated Report is prepared through the joint effort of

a cross-functional team, led by the Bank’s Chief Financial Officer (CFO), representing

various departments as well as subject matter experts. The information is collated from

Senior Management and Board discussions and decisions as well as inputs taken from

internal stakeholders. Several drafts of the report are produced with oversight from the

department heads and the CFO. Members of Bank’s Senior Management team and the Board

are involved in the various approval processes, which are also supported by the oversight

provided by independent assurance providers.

PROMOTERS:

HDFC is India's premier housing finance company and enjoys an impeccable track record in

India as well as in international markets. Since its inception in 2077, the Corporation has
maintained a consistent and healthy growth in its operations to remain the market leader in

mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC

has developed significant expertise in retail mortgage loans to different market segments and

also has a large corporate client base for its housing related credit facilities. With its

experience in the financial markets, strong market reputation, large shareholder base and

unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian

environment.

Best Performing Branch in Microfinance among private sector banks by NABARD, 2018,

Bank of the year & best digital banking initiative award 2017, AIMA Managing India

Awards 2016, Financial Asia poll on Asia's Best Companies 2016, Award for Best

Performance in Microfinance, best managed public company - India Most Valued brand in

India for third successive year, J.P MORGAN Quality Recognition Award World's 30 Best

CEOs – Aditya Puri Best in class straight through processing rates.

Technology:

HDFC Bank operates in a highly automated environment in terms of information technology

and communication systems. All the bank's branches have online connectivity, which enables

the bank to offer speedy funds transfer facilities to its customers. Multi-branch access is also

provided to retail customers through the branch network and Automated Teller Machines

(ATMs).