National Bank for Agriculture and Rural Development (NABARD) launched the Long Term Rural Credit Fund that was announced in the union budget of India for 2014-15. The fund provides re-finance support to cooperative banks and regional rural banks (RRBs) for their agricultural term loan operations with an initial allocation of INR 50 billion. NABARD shall provide refinance facility with repayment period of five years at 7.85% per annum to cooperative banks and RRBs. The fund aims at boosting long term investment credit at the ground level and motivating cooperative banks and RRBs to extend term loans and investment credit to their clients at concessional rates.
Dr. Harsh Kumar Bhanwala, Chairman, NABARD said, “It is the investment credit which catalyzes capital formation and this initiative taken by the Hon’ble Finance Minister will go a long way in promoting agriculture production and productivity.”