THIRUVANANTHAPURAM: Supplyco has signed a contract with a consortium of banks to give the storage price of paddy to farmers quickly. The bank consortium led by State Bank of India together with Canara Bank and Federal Bank will provide a loan of Rs.2,500 to Supplyco on an interest of 6.9%. The earlier PRS loan scheme related to paddy procurement was 8.5%.

With the present deal, Supplyco’s burden will ease by Rs.21 crore.

In the PRS loan scheme, money was transferred into the farmer's account once the paddy was procured. Supplyco will pay back the money the banks had paid the farmers for the paddy. If the Supplyco delays the payment, the farmers will be on the list of nonpayers and will affect the CIBIL score. Moreover, for the 8.5% interest, a 2% penalty interest was paid by Supplyco to the banks.

Under this circumstance, the Supplyco, under government guarantee, is taking the loan from the bank consortium and paying the farmers directly through the banks for the paddy. Supplyco will pay the government a 0.75% guarantee commission. This loan does not have penalty interest.

From the side of the bank consortium, State Bank of India, Assistant General Manager, S Harikumar, Canara Chief Manager, G Prabhakar Raju, and Federal Bank Deputy Vice President, Ajith V Mathew signed the contract with Supplyco finance section Additional General Manager, RN Sathish.