JOIN USState seeks RBI support for its populist programmes
The state government on Thursday will seek the intervention of the Reserve Bank of India (RBI) for effective implementation of the state’s populist scheme of providing low interest loans to farmers and students through nationalised banks.
Chief Minister Yeddyurappa will personally convey the state’s wish list to RBI Governor D Subbarao at a breakfast meeting at Vidhana Soudha on Thursday. Under the state government’s flagship crop loan programme, advances to farmers are provided at three per cent interest through state-run financial institutions.
The RBI had recently stated that the government need not enter into agreements with individual nationalised banks for the purpose but banks will have to be reimbursed. Since nationalised banks charge seven per cent interest on such loans, the state will have to pay the difference. Recently, the state government also announced loans at six per cent interest for educational loans for students to pursue higher education.
Other issues likely to figure in the meeting include advances from central government to the state and finances by NABARD.
Dr Subbarao will later participate in meeting of the Central Board of Directors of RBI which is being held in the City.