FM asks banks to lower interest rates on agriculture credit

Mangalore, Mar 12 (UNI) Union Finance Minister P Chidambaram today called upon the banking industry to provide credit at a low rate of seven per cent to the farming community so that they could repay the loans taken from money lenders at a high rate of interest.

Speaking after inaugurating the state-of-the-art public library constructed by the public sector Mangalore Corporation Bank at a cost of Rs two crore here, he said that unaware of the banks providing agriculture credit at 12 per cent now, most farmers largely depend on money lenders who charged them as high as 22 per cent.

To tide over the situation and help agriculturists who were the backbone of the nation's economic activity, the Congress-led UPA government at the Centre had decided to provide agriculture credit at the rate of seven per cent, he said, adding that the National Bank for Agriculture and Rural Development would refinance the remaining five per cent difference in interest rate to the banks.

Mr Chidambaram informed that to work out a plan in this regard, his ministry had convened a meeting of Chairmen and Managing Directors of all public sector banks and senior officials from NABARD at New Delhi on March 22.

Stating that the cooperative credit structure had collapsed and need to be set in order, he said the Centre had set apart Rs 14,500 crore for revamping and restructuring it. He called upon Karnataka Chief Minister H D Kumaraswamy to sign a Memorandum of Understanding with the Centre to become the first state in the country to go in for restructuring of cooperative credit structure.

MORE UNI MA RG HVB1640