The National Bank for Agriculture and Rural Development (Nabard) has slashed the interest rate on refinance by 150 basis points to 8.5 per cent in respect of loans above Rs 2 lakh extended by the banking sector for farm mechanisation, rural godowns, setting up agri clinics and agri business centres.
With this cut, effective from February 1, the refinance rate for all loans above Rs 25,001 has become uniform.
"The rate cut will accelerate the process of technology transfer to the agriculture sector and supplement sources of input supply and services to the agriculture and rural sectors through agriculture graduates," Nabard said in a statement here today.
It said that the refinance rate for loans upto Rs 25,000 will be 7.5 per cent for the commercial banks (CBs), primary urban co-operative banks (PCBs) and regional rural banks (RRBs). Further, refinance rate for state co-operative banks (SCBs)/ state co-operative agriculture and rural development banks (SCARDBs) will be 7 per cent.
In the case of loans for minor irrigation and wasteland development, the refinance rate is 7.5 per cent for all banks for all slabs. However, for loans upto Rs 25,000, the SCBs/SCARDBs will be charged 7 per cent.
In the case of "other loans" upto Rs 25,000, the interest rate on Nabard refinance is 7.5 per cent and 7 per cent per annum for CBs/PCBs/RRBs and SCBs/SCARDBs, respectively.
An uniform refinance rate of 8.5 per cent and 10 per cent has been fixed for "other loans" from Rs 25,001 to Rs 2 lakh and above, respectively, to the banking sector. Refinance for loans extended by SCBs/SCARDBs for the non-conventional energy sector has been pegged at 9.5 per cent.
For rural housing, refinance rates of Nabard to various banks will be 8.5 per cent for loans upto Rs 1 lakh, 10 per cent for loans above Rs 1 lakh and upto Rs 2 lakh and 10.5 per cent for loans above Rs 2 lakh.
Rate of interest on refinance for financing cold storages and storages of horticultural produce under the capital investment subsidy scheme of the government of India will be 8.5 per cent.
In the case of self help groups (SHGs), the rate of refinance will be 7 per cent for co-operative banks and 7.5 per cent in respect of CBs, RRBs and PCBs. Nabard further said that subject to RBI regulations, the banks were free to decide the rate of interest to be charged by them to the SHGs.
