In a bid to support drought-hit farmers, State Bank of India on Thursday launched a bouquet of measures for farm loan borrowers including interest rate reductions on irrigation and crop loans.
SBI reduced interest rates for minor irrigation loans upto Rs 25 lakhs to eight per cent in the first one year and nine per cent in the second and third years. The existing rates in this category is 10.5 per cent-13,25 per cent.
"SBI has decided to provide interest rate reductions as cash flows of farmers have been hit owing to the drought. We are watching the situations and will come out with more measures if necessary," SBI's general manager, agri business unit, Niranjan Parsha said.
From the fourth year onwards, customers will have to pay the normal interest rates on this loan, Parsha said.
The lender has also reduced interest rates for crop loans between Rs 3-25 lakh to 10 per cent for one year. Presently, crop loans between Rs three to five lakh are priced at 11.75 per cent while those above Rs five lakh and upto Rs 25 lakh is being offered at 12.75 per cent.
Besides, the lender has extended the moratorium period for new minor irrigation loans by additional one year and announced an additional one per cent interest rate concession to borrowers who pay the loan within the stipulated period.
The bank has also brought down the loan processing charges by 50 per cent in order to lessen the burden on the stressed borrowers. The lender has also advised its offices to release the consumption loan portion of Kisan credit cards to farmers to enable them meet their financial needs.
The offers will be applicable to all agri loans disbursed between April 1, 2009 and upto March 31, 2010, Parsha said. "We have designed this scheme to benefit farmers both in the Kharif and Rabi season," Prasha said. State Bank's total agriculture loan outstanding is Rs 57,000 crore (Rs 570 billion) as against Rs 46,000 crore (Rs 460 billion) in the year-ago period.
The lender has disbursed Rs 6,000 crore (Rs 60 billion) worth fresh agriculture loans in the current fiscal. SBI has around 70 lakh customers in the agriculture portfolio.
