Farmers loan interest rates to go down to 7 pc: FM

New Delhi, Mar 14: Finance Minister P Chidambaram today (Mar 14, 2006) said efforts are on to bring down the interest rate for farmer's loans from nine per cent to seven per cent.

Answering a question from TDP member Ravula Chandra Sekar Reddy in the Rajya Sabha, the Finance Minister said interest rates will not be raised further but efforts are on to reduce it.

NABARD provides refinance on short term Seasonal Agricultural Operations (ST-SAQ) at rates varying between 5.5 per cent to 6 per cent and on investment credit under farm/non-farm sector at rates varying from 6.50 per cent to seven per cent per annum.

The Finance Minister said NABARD does not provide agriculture loan directly to the ultimate borrower, nor does it prescribe any rate of interest for onward lending by the borrowing banks.

He said the Indian Banks Association has advised public sector commercial banks to charge interest rates of not more than nine per cent per annum on crop loans upto Rs 50,000.

UNI