SBI extends cheap farm loan period

The country’s largest lender, State Bank of India (SBI) today extended the period of its concessional financing to the farmers against warehouse receipts by five months to September 30, 2009.

The bank has extended its special home and car loans scheme last week at eight per cent and 10 per cent respectively, for the first one year, till September 30, 2009.

The state-run lender had in February started offering loans at a concessional rate of eight per cent to farmers against cold storage and warehouse receipts, in a bid to save them from falling prey to distress sale of their farm produce.

“This initiative has proved to be tremendously popular. Encouraged by the overwhelming market response to its scheme, the largest lender has decided to extend the concessional interest facility of eight per cent per annum until September 30,” the bank said in a statement.

The loan will be available at a fixed rate of eight per cent for a period of 12 months in respect of loans sanctioned and disbursed till the end of September. SBI is the biggest lender to the agriculture sector and has a portfolio of over Rs 60,000 crore and a customer base of over 7 million accounts.

The largest lender also said that it would time the market for storage requirements of the expected bumper wheat crop.