NABARD cuts interest rate by 0.20 percent

The National Bank for Agriculture and Rural Development (NABARD) Monday said it has reduced interest rate by 0.20 percent on long-term refinance facility provided to banks, with a view to promoting investment in agriculture.

The new rate is applicable from June 6.

The revised interest rates on refinance now stands at 9.50 percent for 5 years and above and 9.70 percent for 3-5 years period, NABARD chairman Harsh Kumar Bhanwala said in a statement.

He said the banks availing more than Rs.500 crore in a single drawl will further be incentivised by a reduction of 0.10 percent in interest rates.

"To combat food inflation, efficient agricultural technologies get a further incentive of 50 basis points," he said.

Bhanwala said the reduction in rates would incentivise the cooperative banks, regional rural banks and commercial banks in reversing the decelerating trend of investment credit and will aid in enhancing capital formation in agriculture.