Bangladesh Bank has set the agricultural loan disbursement target for banks at Tk 21,800 crore for the fiscal year 2018-19, increasing by 6.86 per cent, from Tk 20,400 crore for the last fiscal.
Bangladesh Bank announced annual agricultural and rural credit policy and programme at a press conference held on its office premises on Wednesday.
BB deputy governor SM Moniruzzaman said that the central bank set the farm loan release target to increase agricultural production considering the increased demand.
Minimum 60 per cent of the loans would be released to crops production to reduce import dependency on other nations.
‘With the increased demand of farm loans, the BB set the target for state-owned commercial and specialised banks at Tk 9,875 crore and for private and foreign banks at Tk 11,925 crore,’ he said.
BB executive director Ashok Kumar Dey said that the central bank was giving the loan support to strengthen the agricultural and rural economy in the country.
He also said, ‘If corruption in farm loan disbursement could be reduced to the lowest level, the farmers would get the outmost benefit from the loan support, which would ultimately impact rural economy.’
BB agricultural credit department general manager Manoj Kanti Bairagi said that the central bank also brought some changes in previous farm loan policies as the BB made it mandatory for all the banks to disburse at least 10 per cent loans of their annual farm loan target to the fisheries resource sector from FY19.
Besides, the banks have to disburse loans to floating method cultivation, integrated agricultural system, Turkey birds farming and pen method fisheries, he said.
According to the new policy, banks are asked to increase per acre credit limit rationally for crops production sector.
The banks must reserve 3 per cent of the unachieved target amount at BB if the banks failed to achieve the target.
The BB will return to banks 3 per cent reserve if the banks can later disburse the previous year(s) unachieved amounts, otherwise the reserve amount will not be returnable, the policy says.
According to the BB policy, every bank has to disburse at least two per cent of their total lending in the agricultural sector.
The BB has set the projected target of farm loan disbursement for FY18 on the basis of the banks’ outstanding loans and advances.
The banks distributed 105 per cent or Tk 21,393.55 crore of their annual farm loan disbursement target amount in 11 months (July-May) of FY18 due to an increased credit demand from the sector.
Banks disbursed farm loans Tk 17,244.69 crore in FY17, Tk 17,056.43 crore in FY16, Tk 15,978.46 crore in FY15.