SBI grants highest ever loan for Dairy projects in Punjab

Biggest Public sector bank, State Bank of India (SBI) has earmarked Rs 300 cr for Dairy firms in the current fiscal, only for the state of Punjab. This is the biggest ever fresh loan provided to the sector and supposed to encourage the dairy in the beleagured state. In the last fiscal SBI had lent just Rs 15 to Rs 20 crore to the dairy sector in Punjab. Significantly, lending to the dairy sector will comprise close to 25 per cent of SBI's total fresh farm advances targeted for Punjab and Haryana states in the current fiscal. SBI has also roped in Punjab Dairy Development Board and Progressive Dairy Farmers' Association to lend money for setting up commercial dairy venture in Punjab as the state government is laying emphasis on encouraging more and more farmers to adopt dairy as their main profession to come out of traditional wheat-paddy rotation to earn remunerative returns. SBI, with margin money of 25 per cent of total project cost, will be disbursing loan at 10 per cent rate of interest for dairy farm having cows and 10.5 per cent for dairy farm of buffaloes for a tenure of 7 and 9 years, respectively. Apart from this, the bank will not be charging principal amount for two years from the borrowers.