At a time when the banks are mulling to hike the interest rates, the Rajkot-based Rajkot District Cooperative (RDC) Bank has decided to provide agricultural loans at reduced interest rates to the farmers.
The bank will charge two per cent interest for agricultural loans against the normal seven per cent. At a recently concluded annual general meet (AGM) of the bank, the shareholders of the bank have approved the management's proposal to provide agricultural loans at two per cent the interest rate, which was earlier seven per cent, senior bank official informed.
The decision was taken to benefit nearly 200,000 farmers from Rajkot and Junagadh districts. "Most of the farmers cultivate cotton and groundnut in this region. Considering the interests of the farmers and boost the growth of agriculture here, we have decided to provide agricultural loans at a rate of 2 per cent. However, a final decision will be taken at the board meeting of the bank to be held soon," said C N Tarpara, general manager, RDC Bank. The RDC bank has 133 branches spread across Rajkot district and plans to set up 15 branches in Junagadh during the current financial year.
"Once the board of director's approval comes, we would become the first bank in India to provide agricultural advances at the interest rates as low as two per cent. No where in the country, this is being followed," he added. Even while the banks are crying foul over being forced to provide agricultural loans at a rate of seven per cent, the RDC's move to provide agricultural loans at the interest rate of two per cent has come as a surprise for many in the banking circles. The bank is one of the 18 district cooperative banks operational in the state. RDC Bank has deposits worth Rs 1,800 crore with total advances of around Rs 1,650 crore, of which agricultural loans account for about Rs 1,100 crore.