The Hindu Business Line : SBI announces special drought relief schemes

Mumbai, Sept. 3 State Bank of India has announced special drought relief schemes for farmers availing themselves of minor irrigation and crop loans, in view of the weak monsoon and drought conditions, a press release issued on Thursday said.

The schemes are valid for kharif and rabi season 2009-10, i.e. for loans sanctioned and disbursed till the end of March, 2010.

According to the schemes, the interest rate on new minor irrigation loans has been reduced to 8 per cent for the first year and 9 per cent for the second and third years for loans up to Rs 25 lakh.

Margin money

The bank has also reduced the margin money requirement for such loans to 10 per cent flat, from the existing 15 per cent to 25 per cent of the project cost and cut processing charges by 50 per cent.

The moratorium period for such loans has been increased by one year and the repayment period for new loans has also been extended by one year.

For crop loans between Rs 3 lakh and Rs 25 lakh, the bank has reduced the interest rate to 10 per cent for a period of one year.

The bank is also offering an additional concession of 1 per cent interest for regular borrowers for prompt repayment, to encourage timely repayment, the release said. The loan processing charges have been reduced by 50 per cent.

Earlier, in February this year, SBI had frozen the rate on loans to farmers against cold storage and warehouse receipts at 8 per cent for 12 months.

The scheme was initially offered for loans sanctioned and disbursed till May 2009. Later, the bank had extended it till September 2009.

Agri-loan portfolio

SBI’s agricultural loan portfolio as on June 30, 2009 was Rs 55,133 crore, against Rs 42, 426 crore, a growth of 30 per cent.