NABARD to keep farm credit cheaper

Lucknow, May 14 (UNI) Unfazed by funds becoming costlier following Reserve Bank of India (RBI) measures to control inflation, National Bank for Agriculture and Rural Development (NABARD) is not contemplating hiking its farm and rural credit rate, at least in the near future.

''We would continue to offer loans at around seven per cent, the same as last financial year,'' NABARD, Chief General Manager, Sukhbir Singh said addressing a news conference here today.

However, he maintained that commercial banks and Regional Rural Banks (RRBs) would find it rather difficult to stick to their old lending rates to the rural sector, since funds have become dearer of late.

''NABARD is in a better position to stick to its old lending rate due to cheaper source of fund at its disposal and subvention from the central government,'' he explained.

Commenting on the changing face of agri-business in the country with the entry of multinationals in the sector, Mr Singh said the need of the hour was that the cooperative banks and other financial institutions function just like commercial banks.

''Cooperative Banks, RRBs and Primary Agriculture Credit Societies (PACS) should become more professional, technologically savvy and financially stable to face the new challenges at hand,'' he told UNI later.

In the last fiscal, NABARD disbursed a total of Rs 2,280 crore in Uttar Pradesh, including investment credit, short term loan and assistance to RRBs.

Meanwhile, under its Cooperative Development Fund (CDF) set up in 1992, NABARD has released Rs 48.45 lakh to UP Cooperative Bank (UPCB) and District Central Cooperative Banks (DCCB) towards computerisation and to strength their Management Information System (MIS).

The assistance has a interest-free soft loan component of Rs 19.38 lakh to be repaid within five years, he informed.

''There are about 7,000 PACS in UP, which function with bare minimum staff and infrastructure. They need to be supported and given adequate training,'' UPCB Managing Director Onkar Yadav said.

Mr Yadav also touched upon the various rural credit and crop-specific loan schemes in the pipeline.

UNI