PSBs' April-August farm loan disbursals cross Rs86,000 crore

Nationalised banks in the country disbursed loans of a total Rs86,284.70 crore to farmers between April and August 2010, benefiting 77.68 lakh farmers.

The loans have been provided for meeting operational requirements like purchasing tractors, seeds and other agricultural equipments, KV Thomas, minister of state for agriculture, told the Rajya Sabha on Friday.

In order to provide concessional / liberalised loans to farmers, the government is providing crop loans up to a principal amount of Rs3 lakh, at seven per cent rate of interest, from Kharif 2006-07, he said.

This was revised in 2009-10 to provide an additional 1 per cent interest subvention to those farmers who had repaid their short-term crop loans as per schedule.

The subvention was further raised to 2 per cent in 2010-11 for timely repayment of crop loans, bringing the effective rate to 5 per cent. Besides, the limit of collateral-free farm loan has been increased from Rs50,000 to Rs1,00,000, he added.