Nabard has sanctioned loans worth Rs 19,129 crore to states till first week of February under Rural Infrastructure Development Fund (RIDF) for agriculture and allied activities. Out of the allocated Rs 20,000 crore for 2013-14 in the budget, the financial institution has sanctioned 33 projects under agriculture and allied sector, 250 projects under rural connectivity sector and 804 projects under social sector with the total outlay of Rs 6,064 crore.
RIDF is created out of commercial banks’ shortfall in lending to agriculture or priority sector. It started in 1995-96 with a corpus of Rs 2,000 crore. RIDF was instituted in Nabard with the sole objective of giving low cost fund support to state governments and State Owned Corporations for quick completion of projects related to medium and minor irrigation, soil conservation, watershed management and other forms of rural infrastructure.
In order to promote rural credit and rural infrastructure, Nabard reduced refinance rate for banks and other lending agencies in the month of January by 0.20% and the revised rate of interest on refinance for a period of five years for commercial banks, state cooperative banks, regional rural banks and primary urban cooperative banks.
Further, banks drawing refinance of Rs 500 crore and more in a single-drawl will be allowed further reduction of 0.10%, making effective rate of 9.60%. However, for state cooperative agriculture and rural development banks (SCRDBs), a 0.10% reduction is allowed for a single-drawal of Rs 200 crore and above.
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