NABARD doubles its refinance on crop loans

Kochi, Jun 26 (UNI) On request from the Kerala Government, the National Bank for Agriculture and Rural Development (NABARD) today decided to double its share of refinance on crop loans from about Rs 300 crore to Rs 650 crore at an interest rate of 2.5 per cent.

In a statement here, NABARD Chief General Manager B S Shekhawat however said the refinancing was done on condition that cooperatives would lend it to farmers at not more than seven per cent interest.

Interest rates on crop loans now range between 8.5 per cent to 10.5 per cent.

NABARD had insisted on the state government to refund the treasury deposits on the Ernakulam and Palakkad district cooperative banks, amounting to Rs 67 crore and Rs 88 crore respectively, to make them eligible for NABARD refinance.

He said the government should streamline the functioning of the Kerala State Cooperative Bank and enhance its credit absorption capacity to take full advantage of the NABARD refinance of Rs 650 crore at 2.5 per cent.

As per the revised estimate, total crop loans issued during 2005-06 in Kerala were approximately Rs 7,900 crore, including the share of 'service cooperative banks'. Commercial banks provided Rs 3,595 crore, RRBs Rs 1,211 crore and SCBs Rs 990 crore.

The total flow of crop loans during 2006-07 was estimated to be more than Rs 10,000 crore.

RRBs in Kerala would get Rs 325 crore at 4.5 per cent interest rate from NABARD.

UNI ARC AJ 1807