NABARD slashes refinance rate by 0.20% to boost farm investment

National Bank for Agriculture and Rural Development (NABARD) reduced refinance rate for banks and other lending agencies by 0.20 % to promote rural credit and rural infrastructure.
Revised rates: The revised rate of interest on refinance for a period of five years for commercial, state cooperative, regional rural and primary urban cooperative banks will be 9.70%, down from 9.90%. The new rates are effective from January 7.
Relaxation:

• If banks draw refinance of Rs. 500 crore and more in a single drawl, they will be allowed additional reduction of 0.10% and will make effective rate 9.60 %.
• For State Cooperative Agriculture and Rural Development Banks (SCRDBs), a 10 basis point reduction is allowed for a single drawl 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.

Month: Current Affairs - January, 2014