Kerala Chief Minister Pinarayi Vijayan has asked the National Bank for Agriculture and Rural Development (NABARD) to allow a revival package of Rs 2,000 crore, taking into consideration the financial crisis caused by the COVID-19 pandemic.
He wrote a letter to NABARD Chairman Dr Harsh Kumar Bhanwala in this regard.
In the letter, the Chief Minister has sought a loan for the state from the Rural Infrastructure Development Fund (RIDF) at a special interest rate of 2%, instead of the usual 3.9 %. Banks -- including state cooperative banks, rural banks and commercial banks -- should get an increased re-finance at a lower interest rate of 2%, requests Pinarayi Vijayan. Also the interest rate of loans given to small scale businesses should be reduced from 8.4%to 5%, the CM writes.
To promote short term and long term investment loans, state cooperative banks should be able to get long term rural credit fund at an interest rate of 3%, the letter says.
Pinarayi Vijayan also requests more grants from Cooperative Development Fund and Financial Inclusion Fund to help the credit counselling centres opened at NABARD and the Reserve Bank of India.
Finally, he requests the NABARD Chairman to allow 100% re-finance for coronavirus-affected states like Kerala, like it is being done for north-east states.
A day ago, Pinarayi Vijayan announced a financial package worth Rs 20,000 crore to cover health packages, welfare pensions, MGNREGS, free food grains and so on, at a time the state's economy has been hit by the coronavirus pandemic. He also announced that free rice will be given to everyone for one month.
State's Finance Minister Thomas Isaac had also written a letter to Union Finance Minister Nirmala Sitharaman on how the Centre can help the state financially in dealing with COVID-19. Among the various points he raised in the letter, Thomas Isaac asked the Union Minister to increase the allocation for the health sector and allow the state to use the State Disaster Response Fund for dealing with COVID-19.