New Delhi, Aug 21: Parliament today passed a bill to enable the National Bank for Agriculture and Rural Development (NABARD) to reduce transaction costs and provide crop credit to farmers at single digit rate of nine per cent. The National Bank for Agriculture and Rural Development (Amendment) Bill 2003, passed by the Rajya Sabha, provides for direct refinance of central cooperative banks. The bill was passed by Lok Sabha on Monday.


Replying to a debate on the bill, Minister of State for Finance Anandrao V Adsul said that government was thinking of drafting a scheme for rural cooperative sectors and soon farmers will be able to avail loans on their tractors and other assets at competitive rates.


The bill also seeks to obviate the need for extending refinance by NABARD through tiers of the cooperative system.

At present, NABARD cannot refinance District Central Co-Operative Banks (DCCBS) directly and the present amendment was necessary to incorporate this provision in the NABARD Act, 1981 so that the bank can refinance DCCSS directly, on a volunatary basis.

The states which volunteer to implement the crop loan scheme would have the benefit of this direct refinancing, which would reduce transmission costs, directly benefitting the farmers having accounts in co-operatives for their agriculture credit and reduce cost of credit.
Participating in the discussion, BJP's Suresh Bhardwaj said that farmers shoudl get credit at rates similar to those availed by corporate houses. RBS Varma (BJP) and Eknath Thakur (Shiv Sena) also participated in the discussion.

Bureau Report