BB cuts loan interest for dairy farmers to 4pc

Staff Correspondent | Published: 00:09, Oct 29,2018 | Updated: 00:37, Oct 29,2018

 
 

Bangladesh Bank has cut the interest rate to 4 per cent from 5 per cent on loans that the dairy farmers get from the central bank’s Tk 200 crore refinancing fund for the
sector.
BB in a circular on Sunday asked banks and non-bank financial institutions concerned to disburse loans from the fund, which was created for raising milk production and artificial insemination, at 4 per cent interest with effect from November 1. BB created the fund in
2015.
The central bank in its circular also asked banks and NBFIs to claim real amount of interest compensation against the loans to the central bank instead of the existing additional 5 per cent subsidy.
BB officials said that the central lent fund to the banks at 5 per cent interest from the refinancing fund while the total cost of fund of the banks for disbursing loans to the dairy farmers was much
higher.
According to the circular, to avail the compensation against the loans, banks would have to submit application mentioning the real amount of interest compensation to the central bank within one month after concluding a year.
The tenure of the revolving refinancing scheme is 5 years while an investor can take loan for up to three years.

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