The Hindu Business Line : Fall in crop loan disbursals by Nabard in Gujarat

Ahmedabad, April 2 The short-term crop loans disbursed by the National Bank for Agriculture and Rural Development in Gujarat in 2008-09 decreased to Rs 665.27 crore from Rs 803.28 crore in the previous year.

The seven per cent interest implemented by the Central Government for farm credit was a discouragement for most banks and so not many came forward for refinancing, according to Mr S G Siddesh, Chief General Manager, Gujarat Regional Office.

More relief

But this will change next year. The State Government has announced a further subvention of two per cent on interest, in excess of the three per cent currently provided by the Union Government. In totality, the commercial and co-operative banks would get a relief of five per cent to compensate for loss incurred by giving farm credit at seven per cent interest, according to Mr Siddesh.

“The 18 district central co-operative banks would come forward, as they will be compensated by five per cent on their interest margins. This would be beneficial to us as well and would reflect in our books of accounts in the year 2010-11,” he said.

Nabard plans to set up around 60 farmer’s clubs next year, as compared to 405 this year and expects agricultural operations to go up due to the extra interest subvention.

RIDF at new high

Measuring the development bank’s growth rate through the loans disbursed by it to the Gujarat Government for infrastructure development, he said that the RIDF was at an all-time high of Rs 884 crore against the previous year’s Rs 712 crore.

The bank’s revenue generation stems from interest charged on government loans at the rate of 6.5 per cent, interest earned through refinance from commercial banks at nine per cent and 8.5 per cent each from regional rural banks and co-operative banks.

Meanwhile, the long-term investment credit refinance to commercial banks by Nabard this year was recorded at Rs 331 crore against Rs 310 crore the previous year.

More Stories on : Farm credit | Gujarat

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