India's National Bank Reduces Rates by 20 Basis Points16 June 2014
INDIA - Mumbai-based National Bank for Agriculture and Rural Development (NABARD) has reduced rate of interest by 20 basis points (bps) on their long-term refinance facility to banks with an objective to promote investments in agriculture, writes Jagdish Kumar.
The new rates have come into effect on 6 June 2014.
Rates of refinance will now be 9.50 per cent for five years and above and 9.70 per cent for a three- to five-year period. Banks availing more than INR500 crore (INR5 billion) in a single drawl will further be incentivised by 10 bps, Dr Harsh Kumar Bhanwala, Chairman of NABARD said when announcing the new rates.
To combat food inflation, efficient agricultural technologies get a further incentive of 50 basis points, Dr Bhanwala added.
In addition, NABARD shall further give 50 basis points reduction, for innovative agricultural activities which enhance production & productivity, Indian ministry of finance said in a statement.
These activities among others include production under controlled conditions like poly-houses with water-saving drip & fertigation facilities, precision farming and post-harvest management.
NABARD will also extend the 50 basis points rebate for supporting single purpose under area development schemes, mainly to benefit small and marginal farmers.
Dr Bhanwala said that this initiative will incentivise the Cooperative Banks, RRBs and Commercial Banks in reversing the decelerating trend of investment credit and will aid in enhancing capital formation in agriculture.
TheCattleSite News Desk