Bank staff plea to Govt on farm loan rate

Chennai, Jun 11: The All India Coop Bank Employees Federation today appealed to the Central and state governments to ensure the maximum rate of interest charged on farm loans by the NABARD did not exceed three per cent.

In a statement here, Federation General Secretary P Balakrishnan also said NABARD should provide refinance at 75 per cent of the loans disbursed by the cooperative banks in respect of crop loans.

He recalled Union Finance Minister P Chidambaram's Budget speech in which he stated the rate of interest on farm loans up to Rs three lakh, particularly short-term crop advances, will be seven per cent and enjoy refinance from the NABARD.

Mr Chidambaram also assured necessary subvention for NABARD for the refinance facility extended.

He wanted the state governments to bear the interest subsidy of three per cent to help cooperative banks disburse crop loans at reduced rates in which case the advances could be cheaper to the farmers.

Mr Balakrishnan cited the example of Karnataka where the government was providing 7.5 per cent interest subsidy on crop loans which enabled the disbursal of crop loans at four per cent.

In this connection, the federation had submitted a detailed representation yesterday to the Chief Ministers of all the states, including the Tamil Nadu Chief Minister.

He hoped the governments would take into account the federation's aspiration while declaring the policy on farm loan interest rates for this year.

Welcoming the Union Government's decision to increase NABARD's refinance for farm loans from Rs 8,000 crore to 14,000 crore, he said the concessional facility will help farmers to a larger extent.

UNI