BB relaxes conditions for agricultural loans
Monday, 11 February 2008
FE Report
The Bangladesh Bank (BB) has relaxed its conditions for agricultural loans allowing changes to the extent of 20 per cent, in place of existing 10 per cent, while sanctioning credits on the basis of the usual norms for assessing credits requirements for each type of crops and related agri-inputs to increase disbursement of farm credit.
"We have relaxed the condition considering higher prices of agriculture inputs in the market," a BB senior official told the FE Sunday.
He also said the banks will be empowered to sanction more agro-credits for relaxation of the norms to help achieve the targeted agriculture production.
The central bank issued a circular Sunday in this connection and asked the managing directors of eight state-owned commercial banks and financial institutions to follow the new credit norms while sanctioning the farm loan.
The eight state-owned banks and financial institutions are: Sonali Bank Limited, Janata Bank Limited, Agrani Bank Limited, Rupali Bank Limited, Bangladesh Krishi Bank (BKB), Rajshahi Krishi Unnayan Bank (RAKUB), Bangladesh Rural Development Board (BRDB) and Bangladesh Samobaya Bank Limited (BSBL).
The loans are to be sanctioned for eight agro-based sub-sectors like crops, irrigation equipment, livestock, agricultural product marketing, fisheries and poverty alleviation.
The central bank earlier relaxed the existing rules and regulations to allow the flood-affected farmers for taking fresh credits through rescheduling of their previous classified loans.
Under the measure, the banks are allowed to reschedule the agro-credit for one year by relaxing the existing conditionality relating to downpayment.
Meanwhile, agriculture credit disbursement increased significantly during July-December period of the current fiscal, recording a 61.41 per cent growth against the same period of last fiscal.
The flow of such a large amount of fund to the rural economy is aimed to facilitate the farmers to boost their farming activities for recovering the devastation of the last year's cyclone and floods.
"Disbursement of agricultural credit during July-December, 2007 stood higher at Tk 39.26 billion due to inclusion of private commercial banks, compared to Tk 24.32 billion during July-December, 2006." the BB said in its 'Major Economic Indicators: Monthly Update'- January 2008.
The Bangladesh Bank (BB) has relaxed its conditions for agricultural loans allowing changes to the extent of 20 per cent, in place of existing 10 per cent, while sanctioning credits on the basis of the usual norms for assessing credits requirements for each type of crops and related agri-inputs to increase disbursement of farm credit.
"We have relaxed the condition considering higher prices of agriculture inputs in the market," a BB senior official told the FE Sunday.
He also said the banks will be empowered to sanction more agro-credits for relaxation of the norms to help achieve the targeted agriculture production.
The central bank issued a circular Sunday in this connection and asked the managing directors of eight state-owned commercial banks and financial institutions to follow the new credit norms while sanctioning the farm loan.
The eight state-owned banks and financial institutions are: Sonali Bank Limited, Janata Bank Limited, Agrani Bank Limited, Rupali Bank Limited, Bangladesh Krishi Bank (BKB), Rajshahi Krishi Unnayan Bank (RAKUB), Bangladesh Rural Development Board (BRDB) and Bangladesh Samobaya Bank Limited (BSBL).
The loans are to be sanctioned for eight agro-based sub-sectors like crops, irrigation equipment, livestock, agricultural product marketing, fisheries and poverty alleviation.
The central bank earlier relaxed the existing rules and regulations to allow the flood-affected farmers for taking fresh credits through rescheduling of their previous classified loans.
Under the measure, the banks are allowed to reschedule the agro-credit for one year by relaxing the existing conditionality relating to downpayment.
Meanwhile, agriculture credit disbursement increased significantly during July-December period of the current fiscal, recording a 61.41 per cent growth against the same period of last fiscal.
The flow of such a large amount of fund to the rural economy is aimed to facilitate the farmers to boost their farming activities for recovering the devastation of the last year's cyclone and floods.
"Disbursement of agricultural credit during July-December, 2007 stood higher at Tk 39.26 billion due to inclusion of private commercial banks, compared to Tk 24.32 billion during July-December, 2006." the BB said in its 'Major Economic Indicators: Monthly Update'- January 2008.