Bangladesh Bank on Wednesday asked banks to keep one per cent general provision, instead of the existing 2.5 per cent, against all unclassified short-term agricultural and micro credits.
‘Banks will maintain one per cent general provision against all unclassified [regular and irregular] short-term agricultural and micro credits,’ said a BB circular.
BB has taken the decision to encourage participation of the banks in disbursing agricultural and micro credits, the circular added.
Central bank officials said that the decision to lower the provision was taken so that banks could give more credits to farmers in the wake of recent floods which affected crop production.
The provision for classified sub standard and doubtful agriculture loans would remain same at five per cent while classified bad (or loss) agriculture loans would remain at 100 per cent.
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