Punjab asks for rate cut on Nabard loan

Last Updated: Wed, Nov 21, 2012 19:42 hrs

In order to encourage the farmers to seek financial help from the organised sector, the Punjab government is in discussions with the Union government to cut interst rate on agriculture credit by NABARD by a minimum of 2 per cent. The state government has urged the Centre to make available the long- and short- term credit on lesser interest rate to the farmers.

While delivering a key note address at the inaugural function of two day National Conference of Agricultural and Rural Development Banks (ARDBs) in Chandigarh on Wednesday, Parminder Singh Dhindsa, Finance Minister, Punjab said that availability of crop loan on easy terms from agriculture banks was the need of the hour as the cost of inputs is going up.

The Finance Minister urged upon the centre government to lower the rate of interest for the long and short term credits to the agriculture banks through NABARD at least by 2 per cent. He said that the Agricultural Banks are forced to extend credit to the farmers at higher rates as they themselves receiving investment credit from NABARD on higher rates. He said that this is an unwelcome step for the farm sector. He reiterated that by lowering the interest rate on investment credit, not only Agricultural Banks would be able to generate more revenue on the other hand farmers could also improve their economics.

Dhindsa said that the Punjab Government in the recent meeting with the center government urged them to consider the structural reforms in the long and short term credits and also to implement the recommendations of the Vaidyanathan Task Force. He further said that the implementation of the recommendations of Vaidyanathan Task Force could play a catalytic role in ensuring the pace of rural development.

K. Sivadasan Nair, Chairman, National Fedration of State Cooperative Agriculture and Rural Development Banks from Kerala, K.K. Ravinderan, Managing Director and Vishwajeet Khanna, Principal Secretary, Cooperation and G.S. Mangat, MD, PARDB also addressed the gathering.

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