Bihar to charge 7% interest on loan to cooperative bank2 min read
PATNA: Chief minister Nitish Kumar on Friday announced the government would slash the interest rate on its loan to the Bihar State Cooperative Bank (BSCB) by 2%, and asked the bank to pass on the benefit to the 8,463 Primary Agriculture Credit Societies (PACSs) operating in the state.
The state government has also decided to park its funds in select BSCB branches.
The CM was speaking at the inaugural function of the week-long celebration of all-India cooperative movement organised at Gyan Bhawan in Patna. Representatives of PACS, who had come to participate in the function, welcomed the CM’s announcement by thumping their desk.
The state government currently gives loan to BSSC at the interest rate of 9% per annum. The BSSC, in turn, lends money to PACSs at the interest rate of 11% per annum.
“After the government slashes the interest rate by 2%, you should lower the interest rate on loans given to the PACSs to 8%,” the CM said.
Around 1,600 PACSs in the state have defaulted in repayments to the BSCB, it may be mentioned.
Earlier, BSCB chairman Ramesh Chandra Choubey appealed to the CM to rationalise the interest rate. He also requested the government to park its money in the BSCB branches.
Deputy CM and finance minister Sushil Kumar Modi in his address said the government would make a list of cooperative banks as per a set of parameters, in which the government money would be parked.
Modi also said action would be taken against non-banking finance companies which vanish after collecting money from people.
However, Modi’s suggestion that the state government would take steps to apply reservation on the single seat of chairperson of PACS on the pattern of panchayats and urban local bodies evoked protests from PACS representatives attending the function. Modi had to pause for a couple of minutes while delivering his speech in the face of protests.
The CM, speaking after Modi, conveniently skipped the quota issue and only made a vague reference, saying the government had its “commitments”.