NABARD cuts interest rates on medium and long-term refinance

The National Bank for Agriculture and Rural Development (NABARD) today cut interest rates by up to 50 basis points on medium and long-term refinance facilities with immediate effect.
"NABARD has reduced the rate of interest by 20 basis points (bps) on their long-term refinance facility (3-5 years and 5 years) and by 50 bps for the medium-term refinance facility (18 months to 3 years) to banks with an objective to give a spur to investments in agriculture," the bank said in an official release.
Accordingly, the new rates of interest on refinance will now be 9.30 per cent for 5 years, while it will be 9.50 per cent for 3-5 years and 18 months to 3 years period.

"In addition to this rate cut, NABARD shall further give 50 basis points reduction for area development projects and innovative activities which enhance production and productivity of agriculture," the banking agency said.
These activities, among others, include production under controlled conditions like poly houses, water saving drip and sprinkler facilities and precision farming, the release said.
"Banks availing more than Rs 500 crore in a single drawal will further be incentivised by 10 basis points," NABARD said.
In addition to above, NABARD has also slashed the rates of interest by 50 basis points on short-term loans to state cooperative banks and regional rural banks for financing of other prescribed activities (other than crop loans) like financing to weaver's cooperative societies, handloom development corporations and marketing of crops etc.

"The revised rate of interest will now be 10 per cent per annum," it said, adding that the new rates will be applicable from today.