SBI announces 'Special Concessions' to support farmers

Highlights

• Interest rates on new minor irrigation loans reduced from the range of 10.50% -13.25% to 8.5% p.a. (fixed) in the first year and 9.5% (fixed) in the 2nd & 3rd years for loans upto Rs 25 lacs.
• Interest rates on crop loans above Rs 3 lacs and upto Rs 25 lacs reduced from the range of 11.75% - 12.75% to 10% .p a  (fixed) for one year.
• Additional 1% interest concession to borrowers who pay their crop loans within the stipulated repayment period (Effective rate: 9% p.a).
• Additional Moratorium period of one year for new Minor Irrigation loans. 
• Scheme valid for both Kharif as well as Rabi seasons 2010-11 (end of March, 2011).

SBI has announced extension of special concessionary schemes for the farmers availing of all Minor Irrigation loans upto Rs 25 lacs and Crop loans above Rs 3 lacs and upto Rs 25 lacs. The Bank has taken this step to support farmers during Kharif as well as Rabi 2010-11 (similar type of concessions were extended during 2009-10 to combat weak monsoon and drought conditions in the country).

Concessions in all Minor Irrigation loans upto Rs 25 lacs

To support farmers undertaking Minor Irrigation projects, SBI extends concessions in:

a) Interest on new minor irrigation loans reduced from the range of 10.50% -13.25%             to 8.5% for a period of 1 year and 9.5% for the 2nd & 3rd years for loans upto Rs 25 lacs sanctioned and disbursed from 1st April, 2010 to 31st March, 2011.

b) Margin money requirement for new Minor Irrigation loans has been reduced to 10 % flat from the existing range of 15% - 25% of the project cost.  Additional Moratorium period of one year has been given for minor irrigation loans sanctioned during this year. Thus, repayment period for new loans has been extended by one year.

Concessions in Crop loans above Rs 3 lacs and upto Rs 25 lacs

1. Crop production loans upto Rs 3 lacs will be available to farmers at 7% p.a and additional 2% concession for prompt repayment as per GoI guidelines at present.

2. SBI on its own is extending similar support to farmers availing crop loans above Rs 3 lacs and upto Rs 25 lacs with the undernoted concessions:

a) Interest on crop loans has been reduced from the range of 11.75% - 12.75%  to 10% for a period of 1 year for credit limits above Rs 3 lacs and upto Rs 25 lacs, sanctioned and disbursed from 1st April, 2010 to 31st March, 2011.

b) Additional Concession of 1% Interest for regular borrowers for prompt repayment, to encourage timely repayment culture. Thus, the effective interest rate will be only 9% p.a. (fixed) upto one year,  for the borrowers paying promptly.

Interest rates under the Special Concessionary Scheme

Category of Loans	Normal Interest Rate	Concessional Interest Rate
Minor Irrigation Term loans upto Rs 25 lacs repayable in 3 years and above	10.50% p.a to 13.25% p.a. (floating)	a) 8.50% p.a. (fixed) in the first year. b) 9.50% p.a. (fixed) in the second & third years. c) Normal interest rate (floating – card rate) from 4th year onwards.
Crop Loans i) Loans upto Rs 3 lacs ii) Loans above Rs 3 lacs and upto Rs 25 lacs	i) With interest subvention of 2%, effective rate is 7% p.a. ii) 11.75% p.a. to 12.75% p.a. (floating)	i) As governed by Interest Subvention scheme of GoI / RBI. (with additional 2% interest concession for prompt repayment) ii) 10% p.a. (fixed) for one year from the date of disbursement. iii) Additional 1% interest concession upto one year for prompt repayment.