Nabard will raise about Rs 20,000 crore from the market for on-lending to cooperative banks at an interest rate of 4.5% with the aim of providing cheaper crop loans to farmers. The union cabinet has recently approved the proposal. A statement by the government said Nabard will make short-term borrowings at prevailing market rate of interest for approximately Rs 20,000 crore for on-lending to cooperative banks. Additional capital of Rs 2000 crore is to be provided to Nabard for this purpose through the Union Budget, it added. To start with, additional capital of Rs 500 crore may be released during 2016-17 itself. Further, an interest subvention of about 1.8% and Nabard’s administrative cost of 0.2% will be provided according to the scheme of the department of agriculture, cooperation and farmers welfare. Nabard will also coordinate the conversion of operative/live Kisan Credit Cards (KCCs) into RuPay or ATM-enabled KCCs by cooperative banks and RRBs in a mission mode.
