The Orissa government has revised the interest rate on crop loans provided by the cooperative sector from the existing 5 per cent to 7 per cent. The rates are revised with retrospective effective from April 1 this year, the beginning of the kharif season.
The Orissa State Cooperative Bank (OSCB), the apex cooperative bank has recently informed the district central cooperative banks (DCCBs) about the revised interest rates. The state government had reduced the interest rate on crop loan in the cooperative sector from 7 per cent to 5 per cent on October 1 last year in order to boost the credit disbursement during the rabi season.
The interest rate on crop loan from October 1, 2008 to March 31, 2009 was five per cent, said a senior officer of the OSCB. The DCCBs, meanwhile, have informed the Primary Agriculture Cooperative Societies (PACS) and Large Sized Adivasi Multi-Purpose Cooperative Societies (LAMPCS) about the new interest rates.
The state government had borne a financial burden of about Rs 12 crore due to the reduction in interest rate from 7 to 5 per cent in the rabi season, said sources. The government has also revised the interest rate on crop loan of the banks to the PACS and LAMPCS from 4.5 per cent to 5.5 per cent from April 1, 2009. In case of default by the PACS and LAMPCS to the bank, the interest would be charged at 11.5 per cent per annum, added sources.
Similarly, in case of default by the borrower to the PACS and LAMPCS, the interest would be charged at 12.5 per cent per annum, said sources.
