Nabard to discuss farm loan terms on August 18

RAJKOT: National Bank for Agriculture & Rural Development (Nabard) plans to take up the rescheduling of farm loans in the quarterly review meeting of public sector banks’ performance on August 18. It is also considering the provision of a medium-term loan for fodder purchase in draught-hit parts of the country.

“We have been monitoring the weekly rainfall data to get an idea on what is happening on fields and the long-term impact. In west Maharashtra, west Gujarat and Saurashtra where the crop position is not satisfactory due to the lack of rainfall, a special line of refinance at 7.5% to enable banks to finance farmers for cultivation and purchase of fodder is being considered by Nabard,”said Nabard chairman Dr Prakash Bakshi.

He added that the scheme would be finalised in consultation with state governments. “If a state declares annawari (when crop yield is less than 50%) or if a district collector declares village or talukawise annawari, the short-term credit loan can be converted to medium-term loan.

However, if the loan is converted to medium term, the farmer will have to pay back in three installments and lose the benefit of interest subvention,” he said. Short-term credit is available at 7%, on which the Centre gives a 3% subvention for prompt repayment of loans.