BB directs banks to focus more on agri loans

Aiming to tackle a possible food crisis in the coming days, the Bangladesh Bank has instructed banks to focus more on agriculture loans than industrial ones.

“The central bank has asked banks to increase loans for farmers in order to raise agriculture production,” Selim RF Hussain, chairman of the Association of Bankers, Bangladesh (ABB), told journalists after a meeting with the central bank governor on Tuesday.

The meeting, presided over by Governor of the Bangladesh Bank Abdur Rouf Talukder, was held at the regulator’s headquarters in the capital, and top officials of private commercial banks were present.

Selim, also the managing director of BRAC Bank, said the World Bank and the International Monetary Fund had also emphasised agriculture loans.

The Bangladesh Bank last week launched a Tk 5,000 crore refinancing scheme for the agriculture sector to increase domestic production and prevent food grain shortages amid global price hikes triggered by the Russia-Ukraine war.

Under the scheme, which will continue till June 2024, small and marginal farmers as well as sharecroppers can take out loans of up to Tk 2 lakh to cultivate crops and fruits.

The banking regulator in July this year raised banks’ agriculture loan disbursement target by 8.88 per cent to Tk 30,911 crore for the current financial year, which was Tk 28,391 crore in FY22.

Officials at the central bank said agriculture is one of the driving forces of Bangladesh’s economy and its importance is being felt more and more in the wake of the Covid-19 pandemic as well as the recent global situation.

In the July-September quarter of this fiscal year, banks disbursed Tk 6,584 crore in the agriculture and rural credit sectors, which was 2.93 per cent higher than that in the same period of FY22.