APCOB cuts lending rates

By Our Staff Reporter

HYDERABAD, OCT. 14. Crop loans and long-term loans to farmers and agricultural cooperative members will now be available at reduced rates of interest.

According to a decision taken by the Committee of Persons-in- Charge, A.P. State Cooperative Bank Ltd. (APCOB) on Oct. 12, interest margins have been reduced at various levels.

APCOB finances its credit from NABARD, which gives the finance at interest rates varying from 7.0 to 10.5 per cent. APCOB keeps a margin of 1.0 and 1.5 per cent and passes on the finance to District Cooperative Central Banks which keep a margin of 2.5 to 3.5 per cent, passing on the finance to Primary Agricultural Cooperative Societies which keep a margin of 2.5 per cent. The final rate of interest charged to the farmer therefore came to 13.5 to 16 per cent, which was higher than the interest charged by nationalised banks.

APCOB has proposed to NABARD to reduce its margin. Pending this, the State's cooperative banks have reduced their margins at various levels ranging from 0.5 to 2 per cent. In a press release, APCOB claimed that any reduction by NABARD would lead to a further reduction in interest rates.

At present, interest rates on loans up to Rs. 25,000 have been reduced from 13.5 to 11.5 per cent. On loans from Rs. 25,000 to Rs. 2 lakhs for minor irrigation, rates have been reduced from 15 to 13 per cent and on other loans for the same amounts the rate has been reduced from 16 to 13.5 per cent. For amounts over Rs. 2 lakhs, interest rates on minor irrigation loans have been reduced from 16 to 13 per cent and from 16 to 15 per cent for all other loans.

APCOB also approved a scheme for financing of agri-clinics and Agri-Business Centres up to Rs. 10 lakhs for individuals and up to Rs. 50 lakhs for groups up to five.

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Section  : Southern States
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