NABARD initiates measures for promoting rural credit

JAMMU- NABARD has initiated a slew of measures for improving rural credit and rural infrastructure particularly warehousing as decided at the 198th meeting of the Board of Directors chaired by Dr Harsh Kumar Bhanwala, Chairman, NABARD, held atNew Delhi today.

The Board has approved the launch of three crop- specific Pilot Projects with production and post-production interventions to be implemented through Primary Agriculture Co-operative Society (PACS) business models for potato in Hooghly district, West Bengal, tomato inKarnal district, Haryana, and onion in Nasik district, Maharashtra. The total outlay for theprojects is Rs 37.20 crore, comprising loan and grant support from NABARD of Rs 18.43 croreand Rs 2.43 crore respectively and a subsidy support of Rs 16.34 crore from the Central/StateGovernments.

NABARD has sanctioned 548 warehousing projects in seven states amounting to Rs 1,046 crore under the NABARD Warehousing Scheme (NWS). These projects on completion willcreate an additional storage scientific space of 11.30 lakh MT for agriculture commodities and also help in better price discovery for farmers.

As decided by its ALCO, NABARD has revised the rate of interest on refinance providedto banks for investment credit with effect from January 7, 2014. The refinance rate has beenreduced by 20 basis points, and the revised rate of interest on refinance for a period of five yearsfor Commercial Banks, State Cooperative Banks, Regional Rural Banks and Primary UrbanCooperative Banks will be 9.70 percent. The revised rate of interest for refinance for a period ofthree to five years will be 9.90 percent.

Further, banks drawing refinance of Rs 500 crore and more in a single drawal will beallowed further reduction of 10 basis points, making the effective rate 9.60 percent and 9.80 percent respectively. However, for State Cooperative Agriculture and Rural Development Banks (SCRDBs), 10 basis points reduction is allowed for a single drawal of Rs 200 crore and above.

These measures are expected to give a boost to banks for extending investment credit and creation of much-needed warehousing infrastructure for agricultural commodities in the country.

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