Save ryots from clutches of money-lenders, FM tells banks

Mangalore, Mar 12 (UNI) Union Finance Minister P Chidambaram today called upon the banking industry to reduce the interest rate on agriculture credit to farmers to seven per cent from the current 12 per cent to save them from the clutches of money-lenders.

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 borrow from money lenders at a high rate of 22 per cent.

To put an end to such a 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 reduce the interest to 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.

The Minister also said that the Centre had set apart Rs 14,500 crore for restructuring the cooperative credit structure to set it in order.

Assuring the UPA government's full support to the state, he said four major projects, including the 4,000 MW power project, had been approved for the state.

Mr Chidambaram, who was here to take part in the valedictory of the Corporation Bank's year-long centenary celebrations, also released a book on ''Rewriting of Corporation Bank History,'' penned by renowned journalist and Prasar Bharti Chairman M V Kamat.

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