NABARD is planning to introduce the concept of differential interest rates to different commercial banks in case of refinancing activity. The differential rates would be based on the amount of exposure the bank holds in field of agri loans.

According to Chairman of NABARD, Mr Prakash Bakshi, a decision in this regard is expected to be taken in a month's time.

"We are looking at a base-rate-like concept. For instance, we may charge higher interest rates for providing refinance to banks that have given agri loans in regions such as Punjab and lower rates for banks that have lent in regions such as Bihar Jharkhand. The idea is to incentivise the investment that can be used by small and marginal farmers,'' he said.

Presently refinance rate set by NABARD is at 10.5%. It has set a target of offering refinance of around Rs 14000 crore to banks this year.