Haryana urges NABARD to cut interest on coop sector

Chandigarh, Oct 10 (UNI) Haryana Agriculture Minister H S Chatha has urged the National Bank For Agriculture and Rural Development (NABARD) to reduce the rate of interest from 9 per cent to 7.25 percent on refinance extended to the cooperative sector.

Mr Chatha was speaking in a meeting to consider the recommendations of Vaidyanathan Task Force on Long Term Cooperative Credit Structure held at New Delhi today.

He said Haryana Chief Minister Bhupinder Singh Hooda had already taken up this issue with Prime Minister Manmohan Singh and Finance Minister P Chidambram.

While welcoming the recommendations of Vaidyanathan Task Force, he suggested that NABARD should provide refinance to Primary Cooperative Agriculture and Rural Development Banks (PCARDBs) through State Cooperative Agriculture and Rural Development Banks (SCARDBs).

He said the accumulated losses under Non-agriculture lending should also be borne by the Central government. He said PCARDBs having 30 per cent recovery should be allowed to be eligible for assistance under the package.

Even the Banks having less than 30 per cent recovery should be given a period of minimum 2 years to improve their recovery and considered for financial package, he added.

Mr Chatha said these banks should not be given freedom to affiliate themselves with an upper tier of their choice. "Our view is it should be allowed only with prior approval of Registrar Cooperative Societies in special circumstances", he said.

He said keeping in view the need for providing relief on account of high interest rates, the state government introduced One Time Settlement (OTS) Scheme in the year 2006-07.

This scheme envisaged to waive off the entire interest burden of those loanees of PCARDBs who were in default as on June 30, 2006, in case they deposit the entire due principal loan.

Under the scheme, the Bank waived off interest component to the tune of Rs 256 crore of 99,600 beneficiaries. In order to inculcate a habit of regular repayment, a benefit of two per cent interest rebate was allowed to regular repay masters, he added.

UNI