Supplyco signs deal for speedy disbursal of paddy procurement price

Supplyco has entered into an agreement with a consortium of banks aimed at speedy disbursal of paddy procurement price to farmers. The consortium is led by State Bank of India and includes Canara Bank and Federal Bank. It will provide ₹2,500 crore at an interest rate of 6.9% to Supplyco as per the agreement. The interest rate was 8.5% for paddy procurement as per the earlier paddy receipt sheet (PRS) loan scheme. Compared to this, the new agreement is likely to reduce the liability of Supplyco by about ₹21 crore, according to an official communication. The new arrangement will alleviate the issues faced by the farmers under the PRS loan scheme, which was launched by Supplyco to disburse the procurement price directly to the bank account of farmers. Farmers were placed under the defaulters list once the repayment was delayed under the earlier scheme. The corporation had to remit an additional interest of 2% as fine over and above the 8.5% in such cases, according to the release. The consortium of banks decided to provide the ₹2,500-crore loan at a reduced rate based on the guarantee assured by the government. Supplyco will give a 0.75% guarantee commission to the government.