Bangalore: Canara Bank is utilising the services of self-help groups (SHGs), retired postmasters and schoolteachers for disbursement of farm credit in Karnataka, Tamil Nadu and Andhra Pradesh.

"We have 144 such people who are trained and deployed in rural branches in these southern States," R. Prabha, General Manager, Priority Credit Wing, Canara Bank told The Hindu.

The bank had set a target of Rs. 7,025 crores for disbursement as agriculture credit for the current fiscal. "We have already disbursed Rs. 4,800 crores up to November. We are likely to reach the target without any difficulty," he said. The interest rates for farm loans range from 8.5 per cent to 12 per cent depending on the types of farmers and the kind of activity involved.

The bank would also consider re-financing of agricultural loans. Mr. Prabha said Canara Bank had also decided to cut the interest rate on educational loans for girl students by one per cent for the period beginning December 1, 2005 to June 30, 2006.

Those girl students availing themselves of educational loans during this period would get the benefit of lower rates throughout the tenure of the loan.

Canara Bank has the second largest education loan portfolio in the country after State Bank of India with its outstanding loans standing at around Rs. 900 crores. The bank is providing a maximum loan of Rs. 4 lakhs to students pursuing professional courses such as engineering, medicine, biotechnology, bioinformatics and so on or those doing degree or diploma courses recognised by a university or the All-India Council of Technical Education. It recently formulated a scheme to provide loans for students learning flying from the public sector pilot academy Rajiv Gandhi Udan Academy.

"The idea is meritorious students should not be denied of higher education possibilities just because they don't have money to pay for their courses," he said. There was a moratorium period during the period of study.

"The loan repayment will start after the studies are over and the student gets a job or within six months. And, if they go for higher studies, the loan repayment moratorium will continue," Mr. Prabha added.

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