NABARD to float NBFC for offering credit at reasonable rate

Kolkata, Jul 18(UNI) NABARD, the national refinance bank, will float a Non-Banking Finance Company, "NABFIN", with an authorised capital of Rs 100 crore to provide credit to poor sections of the society at an affordable rate.

Speaking to mediapersons here today at the Banking Conclave, organised by FICCI, NABARD CMD Dr Y S P Thorat said, ''NABARD will hold 51 per cent equity while the rest 49 per cent will be held by other commercial banks, including Canara Bank.'' The new company would be operational in the current fiscal.

NABFIN, which would be a subsidiary of NABARD, would target disbursement of Rs 100 to Rs 150 crore incrementally, Dr Thorat said.

''We will show through this venture that micro-finance organisations can also work in a transparent way and charge affordable interest rates,'' he said adding that the micro finance institutions generally charge interest rates between 16 to 30 per cent.

When asked about the rate to be charged by NABARD, Dr Thorat said the rate would be competitive.

'' There are about 10 Micro-Finance institutions in the country but their operational procedures, collection methods, high interest rates charged by them are questionable,'' Dr Thorat said.

UNI