Five PSU banks cut rate on food credit
New Delhi: A consortium of five state-run banks has reduced the interest rate charged on food credit extended to Food Corporation of India (FCI) by 1.5 per cent from the present rate of 10.95 per cent. Though this rate cut is not sufficient with reference to the market driven rate, a saving of around Rs 300 crore on interest alone would be achieved at an estimated average annual borrowing of Rs 20,000 crore from banks.

An official press release said that on the initiative of Food and Consumer Affairs Minister Sharad Yadav, the standing committee consisting of five banks which have the highest share in food credit consortium has agreed to lower the rate of interest. This has been fixed based on the average prime lending rate of the five banks, namely State Bank of India, Canara Bank, Punjab National Bank, Bank of Baroda and Bank of India. These Banks which have the highest share in the food credit consortium will take strategic decisions relating to food credit to FCI and for the overall supervision of the accounts in future.
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