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National Bank for Agriculture & Rural Development (Nabard) will provide refinance with lower interest rate to the farmers of scarcity-affected areas of Gujarat.
"Nabard is considering a special line of refinance at 7.5 per cent to enable banks to finance farmers for cultivation/purchase of fodder. The scheme would be finalised in consultation with the state government," said Prakash Bakshi, chairman, Nabard, who was on a visit to scarcity-affected villages in Rajkot district on Tuesday.
He also mentioned that in case of additional credit demand by farmers due to re-sowing, Nabard would consider sanctioning additional refinance limits to cooperative banks and regional rural banks (RRBs). Adding further he mentioned that reschedulement of crop loans will be available at the rate of 3 per cent, which is less than the bank lending rate.
"Gujarat is one of the worst affected areas and the scheme for refinancing will be finalized within two to three days," said Bakshi.
He said, "Nabard would be willing to join hands with the state government for building model schemes for efficient water management in Narmada canal area."
According to Nabard sources, once the scheme is implemented in Gujarat, it will also be replicated in other parts of the country.
During the visit, he found that most of the major crops like groundnut and cotton have been affected and there was no water available for the crop.
The objective of the visit was to have an on-the-spot assessment of the possible challenges arising out of the scarcity in the region and the role that banking system can play in this regard.