WDRA Hosts Seminar on ‘Role of Financial Institutions in promoting e-NWR based Pledge Finance’

The Warehousing Development and Regulatory Authority (WDRA), operating under the purview of the Department of Food and Public Distribution (DFPD), celebrated its 13th Foundation Day with a seminar on the 'Role of Financial Institutions in Promoting e-Negotiable Warehouse Receipt (e-NWR) based Pledge Finance.' The event took place at the India Habitat Centre in New Delhi and was graced by the presence of Sanjeev Chopra, Secretary of the Department of Food and Public Distribution (DFPD).

During his address, Mr. Chopra emphasized the critical role that WDRA plays in the growth of the logistics and warehousing sector, a segment that accounts for 15% of India's GDP and is experiencing a Compound Annual Growth Rate (CAGR) of 16% per annum. He pointed out the adverse impact of pledge finance against fictitious receipts and sub-standard goods and highlighted WDRA's mission to promote scientific storage and the issuance of electronic-negotiable warehouse receipts (e-NWR) across the country. Only WDRA-registered warehouses are authorized to issue e-NWR, and to date, more than 4,800 warehouses have received WDRA registration. In the fiscal year 2022-23, loans against e-NWR exceeded Rs. 2,400 crores, indicating substantial growth potential in this domain.

Mr. Chopra went on to discuss various measures WDRA has implemented to encourage the development of the warehousing sector, including the waiver of application and renewal fees for two years, government-sponsored warehouse inspection, and the relaxation of net worth requirements for warehouse operators. Additionally, the rationalization of dynamic security deposits, proposed amendments to the Warehousing (Development and Regulation) Act, and the establishment of a credit guarantee fund are on the horizon. He commended organizations such as the Food Corporation of India (FCI) and Madhya Pradesh Warehousing and Logistics Corporation (MPWLC) for mandating WDRA registration.

One of the pivotal developments highlighted by Mr. Chopra was the Digital Gateway, a platform designed to unite repositories, warehouse operators, bankers, and depositors, streamlining the process of pledge finance against e-NWR. He also underscored the potential linkage of crop loans under the Kisan Credit Card (KCC) program with pledge finance against e-NWR, a move that could reduce the financial burden for farmers and banks while benefiting all stakeholders.

T. K. Manoj Kumar, Chairperson of WDRA, addressed the audience, focusing on WDRA's improved performance metrics and its efforts to reduce regulatory burdens on stakeholders. He emphasized the need to make WDRA registration mandatory, particularly for warehouses issuing Negotiable Warehouse Receipts. Kumar commended the FCI and MPWLC for storing their procured stocks in WDRA-registered warehouses and called on other agencies to follow suit. Additionally, he highlighted measures to rationalize the regulatory burden, including the introduction of a new insurance regime and the possibility of registering entities with negative net worth, provided they furnish indemnity bonds.

To boost e-NWR-based pledge finance, WDRA initiated direct engagement with banks, leading to an MoU with the State Bank of India (SBI) that introduced a special product for lending against e-NWR for priority sector lending with concessional features. The support of both public and private sector banks, state governments, and the Indian government is expected to increase pledge finance against e-NWR, enhance liquidity in rural areas, and augment farmers' income. Kumar also mentioned WDRA's upcoming registration of non-agricultural warehouses and the digital framework upgrade, further promoting registration and pledge finance against e-NWR.

Dheeraj Sahu, Joint Secretary of WDRA, highlighted the significant progress made in the past year, with a 150% increase in warehouse registrations and a 64% rise in pledge finance against e-NWR. He mentioned WDRA's outreach initiatives, including collaborations with 12 agriculture universities for awareness programs and MoUs with the State Bank of India (SBI) and Punjab National Bank (PNB) to improve pledge financing against e-NWR. WDRA held conferences with commercial banks in Mumbai and regional rural banks in New Delhi, simplifying registration processes for stakeholders and strengthening the Negotiable Warehouse Receipt system. A presentation explained the e-NWR and Pledge Finance ecosystem, covering the benefits of WDRA registration, challenges in post-harvest finance, and the way forward.

The event also included a felicitation ceremony honoring organizations such as Central Warehousing Corporation, state warehousing corporations, public and private sector banks, marketing boards, cooperative societies, and warehouse operators for their contributions to promoting pledge finance against e-NWR.