Interest Rate Cut For Farm Export-Oriented Units Soon

The Reserve Bank of India has asked commercial banks to reduce interest rates to below their respective prime lending rates (PLR) for export-oriented agricultural processing units to be set up in Agri-Export Zones.

The RBI has sent a letter to commercial banks to cut interest rates charged on loans extended to these units, but it has not specified the quantum of cut. Agricultural and Processed Foods Export Development Authority (Apeda) chairman Anil Swarup said banks would charge 8 per cent interest for loans up to 180 days, whereas a bank chief said his bank would set the interest rate for such loans at 1 per cent below the PLR, which stands at between 11 and 12.5 per cent.

The RBI has asked commercial banks to provide packing credit under the existing guidelines for producing and supplying inputs to farmers so that quality inputs are made available to them.