WB Loan Interest: Big Relief In Loan Interest! Relief For Corporations To Cooperatives In State Govt New Announcement, Know Current Rate

WB Loan Interest: A recent announcement by the West Bengal Finance Department has brought significant relief to various autonomous bodies and cooperatives in the state. The state government has decided to reduce the interest rate on loans and advances provided by them for the fiscal year 2025-26. This reduction compared to the previous year is expected to considerably lighten the debt burden for many organizations.

Major Change in Interest Rates

According to the notification issued by the State Finance Department (No. 1494-F.B.), the interest rate for loans for the year 2025-26 has been fixed at 7.22%. In the previous fiscal year, i.e., 2024-25, this rate was 7.52%. This means the interest rate has been slashed by 0.30% in one go. This decision is likely to have a positive impact on the financial management of municipalities, panchayats, and other government undertakings in the state.

Who Will Benefit?

The benefits of this new interest rate will primarily be available to four specific sectors:

• Local Autonomous Bodies: This includes various Municipal Corporations, Municipalities, Zilla Parishads, Panchayat Samitis, and Housing Boards.
• Commercial & Industrial Undertakings: Various commercial organizations or industrial undertakings in the public sector.
• Cooperative Societies: However, it must be noted that cooperative societies funded by NABARD or NCDC will remain outside this ambit.
• Miscellaneous Loans: This rate will also apply to other miscellaneous loans.

Strict Rules for Loan Repayment

Alongside reducing the interest rate, the Finance Department has set certain rules to maintain transparency in loan repayment:

1. Tenure: Generally, the loan tenure should not exceed 10 years. However, for loans taken as ‘Working Capital’, the tenure is preferred to be between 2 to 3 years and must not exceed 5 years under any circumstances.
2. Installments: The principal amount of the loan must be repaid in equal annual installments. These installments will commence one year after the loan is taken.
3. Penalty: There are strict provisions for failure to repay the loan or interest on time. In such cases, a penalty interest of an additional 2.5% over the normal interest rate will be charged.

Who Is Excluded?

This notification from the Finance Department is not applicable in all cases. Specifically, this 7.22% interest rate will not apply to various state government housing schemes (such as MIGHS or LIGHS) and loans for ‘Sick Industries’. Separate terms and conditions will be determined for them through discussions with the respective departments.

This move by the state government clearly signals an intent to maintain the flow of funds for developmental work while reducing the pressure of loans on these organizations.