Andhra Pradesh chief minister N Chandrababu Naidu today asked the sponsor banks of regional rural banks (RRBs) and Nabard to form a committee and find ways to bring down their rate of interests on loans to small and marginal farmers. The farmers should not pay the price for the inefficiencies of RRBs, Naidu said at the State Level Bankers' Committee (SLBC) meeting.Earlier a majority of the RRBs had expressed their inability to lend to the farmers at the rates sought by the government, which were at 9 per cent for small and marginal farmers and 10 per cent for other farmers. "Our cost of funds itself is in the range of 12 to 14 per cent and it is unviable for us to provide loans at the SLBC-dictated rates," the representatives of RRBs said. Naidu then called upon the sponsored banks to provide funds to help RRBs meet the difference between the cost of funds and lending rates. A majority of banks are also not adhering to the SLBC norms on waiver of collateral security for loans upto Rs 50,000, and charging eight per cent interest rate on loans to self-help groups (SHGs).
