SBI announces farm loan concessions

SBIThe country's largest lender, State Bank of India (SBI), cut interest rates for small irrigation projects and crop loans up to 525 basis points, in a bid to support Indian peasantry affected by drought-like conditions due to poor rainfall in the current crop season.

The bank will offer loans for minor irrigation projects at 8 and 9 per cent interest rates for the first and next two years, for loans up to Rs 25 lakh granted in financial year 2009
-10. The same bank has been till now charging 10.5 per cent and 13.25 per cent interest rate under the same category.

Niranjan Prasha, General Manager (agricultural business unit) of SBI, said: "The idea is to give some relief to the drought-hit farm sector and encourage investment in minor irrigation."

SBI has also increased moratorium period for irrigation loans by one year and reduced processing charges by 50 per cent, given the drought-like situations prevailing in the country. Besides, the bank will extend additional interest rate concession of 1 per cent to the regular borrowers.

Mr. Prasha said that the bank has also directed its offices to expedite agricultural loan disbursement under Kisan Credit Cards scheme, from its crop loans portfolio of Rs
24,000 crore.