 The Finance Ministry has relaxed the lending norms for the warehousing sector in a bid to meet the growing demand for storage capacity in view of the effective implementation of the Food Security Bill.
Under the new norms, NABARD (the National Bank for Agriculture and Rural Development) can refinance bank loans given out for the purpose of constructing warehouses at an interest rate of as low as eight per cent.
The new rate to the warehousing sector is available specifically for the year 2011-2012. Earlier, the refinance rate charged to banks by NABARD was more than 10 per cent.
"NABARD will charge interest at eight per cent to banks," said K R Nair, chief general manager (warehousing division), NABARD, adding, "The banks will charge their customers interest as per their own policies, but adhering to the Reserve Bank of India guidelines."
"This move will undoubtedly be a good one," said a finance ministry official. He added that the banks would now be able to lend more freely as they were assured of getting eight per cent interest on the loans they give out.
The number of registered warehouses across the country currently stands at 115. According to a government study, an additional capacity of about 15 million tonnes is required to be created in 19 states. Stating that NABARD had assessed the net shortfall, Nair corroborated this fact.
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