The government is expected to issue early next fiscal grain-bonds worth Rs 5,000 crore (Rs 50 billion) for raising funds for procurement operations of Food Corporation of India.
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Meanwhile, the food ministry officials told PTI that the ministry was not satisfied with the recent 1.5 per cent cut in banks' interest rate on credit to FCI and would push for a further cut of up to 2.5 per cent.
"The FCI bonds on food credit may get operationalised early next fiscal. On the other hand we are not at all satisfied with the cut in interest rate on food credit to FCI to 9.45 per cent from 10.95 per cent. There is a strong case for a further cut," officials said in New Delhi.
They said the Reserve Bank of India had constituted a technical committee to look into the ways and means of operationalising the FCI bonds in the best possible manner.
The committee comprising officials of RBI, banks, food ministry and SBI Caps is working out the modalities to issue 'grain bonds' at the earliest.
"The committee has already met twice and will soon be submitting its report. Once the grain-bonds are issued, banks will be under pressure to reduce rates or else run the risk of losing a large guaranteed borrower," they added.
They said the ministry was working on both the issues of tapping the capital market and pushing for further cuts in interest rate of the banks lending money to the FCI for carrying its procurement and buffer stock operations.
