SBI slashes interest rates for agriculture loans
State Bank of India (SBI) on Thursday slashed rates for farmers looking for minor irrigation and crop loans. As part of its special drought-relief schemes, the bank has taken this step to support farmers who have been hit by the weak monsoon this year.
SBI has reduced interest rates to 8% in the first year and 9% in the second and the third year for loans up to Rs 25 lakh, sanctioned till the end of March, 2010. The step is one of a series of measures being taken by the banking sector to make available easier loans to farmers hit by drought that is expected to reduce foodgrain production by at least 18 million tonne this year, impacting rural income.
The margin money requirement for new minor irrigation loans has also been reduced to 10% flat from the existing 15 to 25% of project cost.