K'taka Vikasa Grameena Bank reduces interest rate

The Karnataka Vikasa Grameena Bank (KVGB), covering nine districts in north and coastal Karnataka, has decided to cut the interest rate on crop loans up to Rs 3 lakh to 7 per cent.

KVGB chairman B S Surendra in a release said that the decision to slash the interest rate was taken to encourage farmers to avail of more loans and increase agriculture production and their income.

The lowered interest rate will be applicable with retrospective effect from April 1 in all nine districts of the bank's purview.

Thus, for the Kharif and Rabi seasons of the year, crop loans will be available at 7 per cent. Surendra said that the bank had disbursed Rs 435.71 crore to the agricultural sector of which Rs 377 crore was crop loan.

In the present fiscal, the bank proposes to disburse Rs 1,100 crore of which Rs 566 crore will be earmarked for the agricultural sector.

Earlier, the crop loans were available at 9 per cent for loans up to Rs 5 lakh, 12 per cent for loans above Rs 50,000 up to Rs 2 lakh. For loans above Rs 2 lakh, the rate was 13 per cent. Surendra said that on the whole the reduction in the interest rate was 6 per cent.

He expects about 1.5 lakh farmers to take advantage of the facility.