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NABARD Reduces Rates of Refinance: Focus on Investment Credit
Jun 12, 2014

NABARD has reduced the rate of interest by 20 basis points (bps) on their long term refinance facility to banks with an objective to promote investments in agriculture. The new rates will be applicable from 6 June 2014.

The rates of refinance will now be 9.50% for 5 years and above and 9.70% for 3-5 years period, Banks availing more than Rs.500 crore in a single drawl will further be incentivised by 10 bps. To combat food inflation, efficient agricultural technologies get a further incentive of 50 basis points

In addition, NABARD shall further give 50 basis points reduction, for innovative agricultural activities which enhance production & productivity. These activities among others include; production under controlled conditions like poly houses with water saving drip & fertigation facilities, precision farming, post-harvest management, etc. The list includes 12 such innovative farm practices to enhance fruit and vegetable production. This initiative is aimed at combating the food inflation by addressing the supply side constraint.

NABARD will also extend the 50 basis points rebate for supporting single purpose under area development schemes, mainly to benefit small and marginal farmers. This initiative will incentivise the Cooperative Banks, RRBs and Commercial Banks in reversing the decelerating trend of investment credit and will aid in enhancing capital formation in agriculture.


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