Home ›› 20 Dec 2022 ›› Front
The central bank will form a Bangladesh Bank Agricultural Development Common Fund (BBADCF) using the undisbursed portion of agriculture and rural loans to invest in increasing agro production.
Banks, which could not reach their target of disbursing agriculture and rural loans, have to deposit money equivalent to the undisbursed amount of loans in the BBADCF, according to a central bank circular issued Monday.
The Bangladesh Bank would give 2 per cent interest on the deposits, it added.
The BBADCF funds would be allocated among banks in proportion to their capacity, while banks have to repay the loans to the central bank within 18 months with 2 per cent interest.
With the allocated funds, banks can give loans to farmers using their network (except microfinance institution linkage) with an 8 per cent interest, the circular read.
The scheduled banks can disburse loans of BBADCF money among the farmers using respective banks’ networks and can charge an 8 percent interest rate to the farmers’ level.
However, the banks cannot disburse the loan to microfinance institutions (MFIs), the notification said.
The lender banks have to form a ‘Risk Mitigation Fund’ with 1.0 per cent of disbursed loans from BBADC funds.
Banks would be allowed to transfer 4 percentage points of the interest to their income segment on the loans made from the fund.
The BB announced a new agricultural credit policy with a target of Tk 30,911 crore for the current financial year. The target is 8.88 per cent higher than the previous year’s target Tk 28,391 crore.
Considering the increased demand for agricultural and rural credit, the disbursement target for the state-owned and specialized commercial banks is fixed at Tk11,758 crore
For the private and foreign commercial banks, it is fixed at Tk 19,153 crore.
The Agriculture Credit Department (ACD) of BB announced the ‘Agricultural and Rural Credit Policy’ in July, giving importance to increasing agriculture production considering the Covid-19 pandemic and recent global situation.
In the previous FY-22, all the scheduled banks disbursed agricultural and rural credit of Tk 28,834.21 crore against the target of Tk 28,391 crore, which is approximately 101.56 per cent of the affixed target.
The agricultural and rural credits were disbursed among 33, 04,811 persons, a total of which 17, 97,052 women borrowers have received Tk 10,829.39 crore.
Besides, 24, 99,945 small and marginal farmers have received around Tk 20,182.30 crore from different banks.
Moreover, Tk 19.59 crore was disbursed among 4,073 farmers of char, haor, and less developed areas of the country in the last fiscal year.
