SBI slashes interest rates for agri loans

MUMBAI: In a bid to support drought-hit farmers, State Bank of India today launched a bouquet of measures for farm loan borrowers including interest rate reductions on irrigation and crop loans.

SBI today 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 anounced an additional one per cent interest rate concession to borrowers who pay the loan within the stipulated period.