Nabard reduces refinance rate by 20-30 bps to boost farm investment

KOLKATA: National Bank for Agriculture & Rural Development or Nabard has slashed refinance rates by 20-30 basis points to boost farm investment and building warehouses.

"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," Nabard said Thursday.

The agriculture loan refinance bank has took the decision in its first board meeting under new chairman Harsh Kumar Bhanwala, who assumed charge late last month.

Nabard has lowered the rates by 20 bps to 9.70% per annum for a five-year loan and to 9.90% for a three-to-five loan. Commercial banks including regional rural banks, state cooperative banks and primary urban cooperative banks will benefit from this move which comes on effect from January 7.

Further, banks drawing refinance of Rs 500 crore and more in a single transaction will get an additional 10 bps reduction, making the effective rate 9.60% and 9.80% respectively for five years and three-to-five years. State cooperative agriculture and rural development banks will get this 10 bps additional benefit for minimum Rs 200 crore refinance in single tranche.