State Bank of Mysore, an associate of the largest lender of the country, State Bank of India has come up with an efficient crop loan scheme for farmers which will charge an interest of only 2%. According to a top official of the bank, it is for the first time that any bank is offering so low a rate of interest.
While launching the scheme, Dilip Mavinkurve, managing director, SBM said, "Last year was not a good year for our farmers as Karnataka experienced both very dry conditions and floods in quick succession. In order to encourage and motivate farmers to avail of crop loans, we have formulated the scheme called Mysore Bank Prathiphala Yojane to offer the lowest rate of interest on farm loans."
The scheme would also offer an additional discount of 1% per annum for timely repayment on all crop loans. The center has already given rebate of 2% in interest on loans upto Rs 3 lakh.
The bank aims to disburse additional loans worth Rs 1500 crore under this scheme this year. Currently, SBM's agriculture advances are about Rs4,200 crore of which Rs1,200 crore is for production credit and Rs3,000 crore is for investment credit.