Country's largest public sector lender State Bank of India launched a slew of measures for farm loan borrowers, including interest rate reductions on irrigation and crop loans, to support drought-hit farmers.
SBI today reduced interest rates for minor irrigation loans up to Rs 25 lakhs to eight per cent in the first one year and nine per cent in second and third year. The existing rates in this category are 10.5 per cent to 13,25 per cent.
"SBI has decided to provide interest rate reductions as cash flows of farmers have been hit owing to the drought. We are watching the situation and will come out with more measures if necessary," SBI's General Manager (Agri business Unit) Niranjan Parsha told PTI.
From fourth year onwards, customers will have to pay normal interest rates on this loan, Parsha said.
The bank has also reduced interest rates on crop loans between Rs 3-25 lakh to 10 per cent for one year.
At present, crop loans between Rs three to five lakh are priced at 11.75 per cent while those above Rs five lakh and up to Rs 25 lakh are being offered at 12.75 per cent.
Besides, SBI has also extended the moratorium period for new minor irrigation loans by additional one year and announced an additional one per cent interest rate concession to borrowers who pay loan within the stipulated period.