Chandigarh:National Bank for Agriculture and Rural Development (NABARD) on Tuesday said its total business size would cross Rs 1.50 trillion by the end of current fiscal with lending for rural infrastructure constituting bulk of total business mix.
“We are expecting our total business will cross Rs 1.50 trillion by end of 2010-11,” NABARD, executive director, Amaresh Kumar said.
The bank had total business of Rs 1.36 trillion in last fiscal, he said, on the sidelines of zonal seminar on “Preparedness of Agriculture Rural Development Banks’ for Revival”.
40% of NABARD’s total business represents extending advances to states under Rural Infrastructure Development Fund (RIFD) at rate of 6.5%.
“Almost Rs 60,000 crore of funds will be advanced under RIDF to states in this fiscal,” Kumar said. Rest of NABARD’s total business constitutes crop loan and investment credit.
In the wake of rising cost of funds, NABARD in January 2011 has also revised the interest rate on refinance upward for commercial banks and state cooperative banks across the country.
“The interest rate has been raised by 50 basis points for commercial banks and 25 basis points for cooperative segment this month,” Kumar added.
With the revision in interest rate, the new interest rate on refinance for cooperative sector is pegged at 9% per annum and 9.75% for commercial banks.
During the start of the current fiscal, the rate of interest in refinance stood below 8% for cooperative sector and 8% for commercial banks.