INDIA - To increase long term credit in agriculture sector, the National Bank of Agriculture and Rural Development (NABARD) has launched an $820 million rural credit fund.
Announcing this, Dr. Harsh Kumar Bhanwala, chairman of NABARD (pictured) said that this will motivate the cooperative banks and regional rural banks (RRBs) to extend term loans/investment credit to their clients at concessional rates.
“It is the investment credit which catalyses capital formation and this initiative taken by the Indian finance minister, Arun Jaitley will go a long way in promoting agriculture production & productivity.”
Dr. Bhanwala also mentioned that the share of cooperative banks and RRBs in investment credit in agriculture and allied sectors was an abysmal 13 per cent in 2013-14.
“We shall provide refinance facility with repayment period of 5 years at 7.85 per cent per annum to Cooperative Banks and Regional Rural Banks and stated that NABARD will advise these banks to provide long term credit at concessional rates,” Bhanwala explained.
With an aim to boost long term investment credit at the ground level, Indian finance minister in the Budget 2014-15 has announced creation of new fund named Long Term Rural Credit Fund with NABARD to facilitate providing refinance support to Cooperative Banks and RRBs for their gricultural term loan operations with an initial allocation of $820 million during 2014-15.