What is a warehouse receipt?
A warehouse receipt is a document issued by a warehouse to depositors against the goods/commodities deposited in the warehouse. Warehouse receipts can be either negotiable or non-negotiable. It is a document of title to goods. A warehouse receipt can be negotiable or non-negotiable and it can be in writing or in electronic form.
A negotiable warehouse receipt means a warehouse receipt under which the goods represented therein are deliverable to the depositor and the depositor holds a good title and he/she can transfer the goods by endorsement.
A typical warehouse receipt contains the following details:
Ø Receipt number and date
Ø Warehouse address, registration number and date up to which it is valid
Ø Person who deposited the goods
Ø Description of goods and their market value
Ø Storage and handling charges
Ø Whether it negotiable or non-negotiable
Ø Others
The Warehousing Development and Regulatory Authority (WDRA) was set up by the Central Government in October 2010 as per the Warehousing Development and Regulation Act. WDRA works for the development and regulation of warehouses. As per the Act, all warehouses in the country have to be registered with WDRA.
Around 150 warehouses have already been registered under WDRA. Warehousing business involves maintaining storage of goods and issuing negotiable warehouse receipts.
NCMSL became the first private sector company to issue a Negotiable Warehouse Receipt (NWR) in the country on 02 October 2011. The first NWR has been issued at Kaithal, Haryana, for Paddy. NWR can be issued only by the warehouses that are registered with WDRA.
NWR is very useful to farmers as they can store their produce in the registered warehouses, avail bank finance against the NWR and wait for a better price. With this NWR, banks in India are in a better position to offer pledge loans against warehouse receipts, increasing the credit flow to rural areas.
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