HYDERABAD: Keeping in view the drought situation in the State, the State Bank of India (SBI) has initiated measures to mitigate the problems faced by farmers pertaining to loans.
According to a statement from the bank, interest on new minor irrigation loans has been reduced to 8 per cent for a period of one year and 9 per cent for the second and third years for loans up to Rs 25 lakh till the end of March 2010. The margin money required to avail new minor irrigation loans has been reduced to 10 per cent of the project cost, down from 15 to 25 per cent.
The maximum period for minor irrigation loans has been given an additional extension of one year in view of the drought.
The repayment period for new loans has been extended by one year. Loan processing charges have been reduced by 50 per cent.
Interest on crop loans has been reduced to 10 per cent for a period of one year for credit limits above Rs 3 lakh and up to Rs 25 lakh till the end of March 2010.
An additional concession of 1per cent interest for regular borrowers for prompt repayment to encourage timely repayment culture. Loan processing charges have been reduced by 50 per cent.
Besides, the SBI, while advising branches to support farmers by extending all calamity benefits, also advises its offices to release the consumption loan portion of Kisan Credit Cards to farmers to enable them to meet their other needs.
The interest rate under the special drought relief scheme is as follows: Minor irrigation: For term loans up to Rs 25 lakh repayable in three years and above, the interest is 8 per cent (fixed) in the first year, 9 per cent (fixed) in the second and third year, and normal interest rate (floating card rate) from the fourth year onwards. At present, the interest rate varies from 10.5 per cent to 13.25 per cent per year (floating).
Crop Loans: For credit limits up to Rs 3 lakh there is no change in the interest rate.
The existing rate with interest subvention of 3 per cent, the effective rate is 7 per cent. For credit limits above Rs 3 lakh and up to Rs 5 lakh, the interest rate is 10 per cent per year (fixed). The existing rate of interest is 11.75 per cent per year (floating).
For credit limits above Rs 5 lakh and up to Rs 25 lakh, the new interest rate is 10 per cent per year (fixed for one year). This compares favourably with the existing interest rate of 12.75 per cent per year (floating).