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The special banks providing Long Term Loans are called Land Development Banks (LDA). The history of LDB’s is quite old. The first LDB was started at Jhang in Punjab in 1920. But the real impetus to these banks was received after passing the Land Mortgage Banks Act in 1930’s (LDB’s were originally called Land Mortgage Banks). After passing this Act LDB’s were started in different states of India.

The Agriculture Credit Review Committee (ACRC) in 1989 emphasised the bigger role for the LDBs and recommended to incorporate development of agriculture and its allied activities including wastelands and non-farm sector development.

The banks in due course diversified their activities and at the instance of the NABARD in the year 1982 they started financing for agriculture and rural development activities including wastelands. However, late eighties and the beginning of nineties were the crucial period in which LDBs adopted financing long term loans for more significant rural development activities like, village and cottage industries, rural artisans etc.

Besides financing for rural housing schemes under NHB refinance was introduced by the banks in selected states like Kerala, Karnataka, Uttar Pradesh, Maharashtra, West Bengal etc. In view of broader role of LDBs they are now known as State Co-operative Agriculture and Rural Development Banks (SCARDBs).





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