Cabinet approves short term market borrowing by NABARD for lending to Cooperative Banks

New Delhi [India], Jan. 24 (ANI): The Union Cabinet on Tuesday approved the proposal of short term borrowing by the National Bank for Agriculture and Rural Development or NABARD, in order to lend funds to Cooperative banks. The approval will ensure increased availability of short term crop loans to farmers through Cooperative banks at reduced rate of interest. This, in turn, will promote digital and cashless transactions by farmers. The decisions will enable NABARD to make short term borrowings at prevailing market rate of interest for approx. Rs.20, 000 crores for on-lending to Cooperative Banks at 4.5 percent rate of interest. Interest Subvention of about 1.8% and NABARD's administrative cost of 0.2 percent to be provided as per the scheme of Department of Agriculture, Cooperation and Farmers Welfare (DAC&FW). The extent of interest subvention may vary depending on the rate at which NABARD raises funds. NABARD will coordinate the conversion of operative/live KCCs into RuPay/ATM-enabled Kisan Credit Cards (KCCs) by Cooperative Banks and Regional Rural Banks (RRBs) in a mission mode. In the light of good monsoon, expectation of increased credit demand and in order to boost agricultural production, farmers need to be supported through Cooperative Banks, which are capable of providing credit easily to help them expand their agricultural operations. (ANI)