NABARD cuts interest rate by 0.20 per cent to boost agri investment

The National Bank for Agriculture and Rural Development (NABARD) has reduced interest rate by 0.20 per cent on long-term refinance facility provided to banks, with a view to promoting investment in agriculture.

The new rate is applicable from June 6.

"The revised interest rates on refinance now stands at 9.50 per cent for 5 years and above and 9.70 per cent for 3-5 years period," NABARD chairman Harsh Kumar Bhanwala said in a statement.

He said the banks availing more than Rs 500 crore in a single drawl will further be incentivised by a reduction of 0.10 per cent in interest rates.

"To combat food inflation, efficient agricultural technologies get a further incentive of 50 basis points," he said.

Bhanwala said the reduction in rates would incentivise the cooperative banks, regional rural banks and commercial banks in reversing the decelerating trend of investment credit and will aid in enhancing capital formation in agriculture.