Mumbai: In a bid to support drought-hit farmers, State Bank of India on Thursday launched a bouquet of measures for farm loan borrowers including interest rate reductions on irrigation and crop loans.
SBI reduced interest rates for minor irrigation loans upto Rs25,00,000 to 8% in the first one year and 9% in the second and third years. The existing rates in this category is 10.5-13.25%.
“SBI has decided to provide interest rate reductions as cash flows of farmers have been hit owing to the drought. We are watching the situations and will come out with more measures if necessary,” SBI’s general manager, agri business Unit, Niranjan Parsha said.
From the fourth year onwards, customers will have to pay the normal interest rates on this loan, Parsha said.
The lender has also reduced interest rates for crop loans between Rs3-25 lakh to 10% for one year.
Presently, crop loans between Rs three to five lakh are priced at 11.75% while those above Rs500,000 and upto Rs25,00,000 is being offered at 12.75%.
Besides, the lender has extended the moratorium period for new minor irrigation loans by additional one year and anounced an additional one per cent interest rate concession to borrowers who pay the loan within the stipulated period.