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Anticipating more demand for loans from farmers (with the kharif crop doing well), the National Bank for Agriculture and Rural Development (Nabard) intends to raise Rs 5,000 crore before March 31, 2011.
Mr Prakash Bakshi, Executive Director, Nabard, told Business Line that the bank expects to increase its target for short-term crop loans to Rs 30,000 crore from its budgeted Rs 25,000 crore.
Without disclosing details, Mr Bakshi said that the additional resources raised would be a mix of short-term loans and long-term loans.
Today, prompt-paying farmers get loans at 7 per cent interest, while the lender gets 9 per cent — the difference of 2 per cent is borne by the government (subvention).
Mr Bakshi said Nabard is asking the government to raise this subvention to 7 per cent, because interest rates are going up.
“We expect to place a request with the government to increase the subvention to 7 per cent,” said Mr Bakshi. The cost of credit has gone up and therefore the demand to increase the subvention.
Meanwhile, Nabard expects 400 of the state and district cooperative banks to adopt core banking solution by September this year. Currently 80 co-operative banks have evinced interest to implement CBS, he said. On behalf of these co-operative banks, Nabard would negotiate with the service provider to maintain and make investment on setting up the CBS platform and the co-operative banks would pay the user charges.
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