UP Government Brings Down Co-op Bank Loan Interest to 6% for Small Farmers

Small and marginal farmers in Uttar Pradesh are set to pay far less on cooperative loans, after Chief Minister Yogi Adityanath announced that the interest rate at UP Cooperative Rural Development Bank will drop from 11.5 per cent to 6 per cent.

The announcement came on Sunday at the 'Yuva Sahakar Sammelan’ in Lucknow, where Yogi Adityanath said the state will shoulder the remaining subsidy, ensuring farmers receive cheaper institutional credit through cooperative land development banks across Uttar Pradesh.

cooperative banks loan interest rate and state-backed subsidy

Detailing the support, the Chief Minister said, "Under the Mukhyamantri Krishak Samridhi Yojana, loans will now be provided at six per cent interest rate through the LDB, with the remaining interest subsidy to be borne by the state government." The measure is aimed at easing borrowing costs for small cultivators.

Yogi Adityanath argued that earlier governments damaged cooperatives, while the current BJP administration is pursuing "one cooperative bank per district". According to the Chief Minister, stronger district-level institutions will broaden access to credit and services for rural communities dependent on agriculture and allied activities.

cooperative banks loan interest rate, revival claims and sector reforms

Sharing a timeline of sector recovery, Yogi Adityanath said, "Before 2017, the condition of district cooperative banks was extremely poor. Sixteen banks had been declared defaulters and had their licenses revoked by the Reserve Bank of India. Today, these banks are healthy, contributing not only to their members but also to the prosperity of farmers," highlighting the turnaround claimed under the BJP government.

The Chief Minister alleged that previous regimes encouraged a "one district, one mafia" culture, which he said harmed cooperatives and locked up farmers’ savings. Yogi Adityanath stated, "The BJP government gradually returned Rs 4,700 crore deposited by farmers in the 16 banks whose licenses had been revoked. Now, the banks are functioning effectively," presenting the repayment as a key corrective step.

The government is also promoting digitisation, e-governance and clearer rules to build accountability in cooperatives, which Yogi Adityanath described as vital for trust, social capacity and self-reliance. The Chief Minister called for adequate staff in societies that handle fertilisers, chemicals and pesticides, arguing that better manpower and systems would deepen farmer participation and support the reduced cooperative banks loan interest rate policy.