National Bank for Agriculture and Rural Development
As farmers suffer, NABARD offers soft loans to corporates
The National Bank for Agriculture and Rural Development
(NABARD), which is dedicated to promoting rural development by providing soft loans to State governments for
social sector projects, has given hundreds of crores as loans to corporates on concessional terms.
In a circular of September 27, 2011, NABARD, making a significant deviation from its earlier policies, included private entities as eligible institutions without consulting the RBI.
In another circular of December 23, 2011, NABARD further revised the scheme, again without consulting the RBI, to provide private firms an interest rate rebate of 1.5%.
In violation of the regulated 8% rate levied by RIDF, an avenue was created for flow of funds to corporates and release of the interest rate rebate to the borrowers directly by NABARD.
In a circular of September 27, 2011, NABARD, making a significant deviation from its earlier policies, included private entities as eligible institutions without consulting the RBI.
In another circular of December 23, 2011, NABARD further revised the scheme, again without consulting the RBI, to provide private firms an interest rate rebate of 1.5%.
In violation of the regulated 8% rate levied by RIDF, an avenue was created for flow of funds to corporates and release of the interest rate rebate to the borrowers directly by NABARD.
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