4 days ago
- Business
- New Indian Express
Congress MLC Dinesh Gooligowda writes to CM, urges to pay additional interest rate to NABARD
BENGALURU: Congress MLC Dinesh Gooligowda has written to Chief Minister Siddaramaiah and Deputy CM DK Shivakumar to pay an additional interest rate of 4.25% to NABARD on behalf of the state Apex Bank, which will then be able to borrow higher amounts from the central agricultural institution.
The additional loan will enable the Apex Bank, DCC banks and primary societies to conduct business sustainably and provide necessary services to farmers. Every year, NABARD provides loans to DCC banks through the Apex Bank at low interest rates. DCC Banks provide loans to farmers through primary agricultural cooperative societies in their jurisdiction, Gowda pointed out in his letter.
Last year, NABARD provided Rs 5,450 crore loan to the Apex Bank at 4% interest rate. But this time, NABARD has limited the amount that can be borrowed at 4% to Rs 2,700 crore. 'For additional loans, it charges 8.25% interest,'' he stated.
These restrictions will lead to capital shortage for the Apex Bank and DCC banks and affect distribution of loans to farmers for the kharif season. This will in turn affect the foodgrain production targets for the year, he wrote.
