Congress MLC urges Karnataka to pay additional RI of 4.25% to NABARD to avail more loans to grant farm credit

He urged the government to pay 4.25% more rate of interest to NABARD on behalf of the State Apex Bank and to avail the required money, which in turn will enable DCC banks and Primary Agricultural Cooperative Societies (PACS) to provide necessary services to farmers. | Photo Credit: SAMRAJ M

Congress MLC Dinesh Gooli Gowda has requested the government of Karnataka to bear an additional interest demanded by NABARD on behalf of the State Apex Bank to borrow more loans and help achieve the State’s foodgrain production target.

In 2024-25, NABARD provided ₹5,450 crore loan to the State Apex Bank at 4% interest rate, which enabled cooperative banks to provide loans to farmers. However, in 2025-26, NABARD has limited the loan amount to ₹2,700 crore to the apex bank at 4% interest, he said.

However, the State Government aims to distribute ₹28,000 crore credit to 37 lakh farmers in 2025-26.

The MLC said NABARD is ready to provide additional loans as required by Karnataka, but will charge 8.25% interest (4.25% additional) for the loan.

He urged the government to pay 4.25% more rate of interest to NABARD on behalf of the State Apex Bank and to avail the required money, which in turn will enable DCC banks and Primary Agricultural Cooperative Societies (PACS) to provide necessary services to farmers.

In a letter to Karnataka Chief Minister Siddaramaiah, Deputy CM D. K. Shivakumar, Cooperation Minister K.N. Rajanna, the MLC wrote: “Due to NABARD’s regulations, there is a possibility of capital shortage for State Apex Bank and DCC banks for the kharif season loan distribution. As a result, DCC banks and PACS would not be able to provide adequate loans to farmers. There is a possibility that the State might not be able to produce the targeted foodgrains of 160.74 lakh tonnes in 2025-26 due to constraints on borrowings by farmers.”

Published - June 02, 2025 10:30 am IST