RAKUB seeks guarantee for 3 more years

FE REPORT

The Rajshahi Krishi Unnayan Bank (RAKUB) has requested the government to extend the tenure of state guarantee for pre-finance loan worth Tk 10 billion three more years with a view to operating agri and rural loans.

RAKUB managing director Wahida Begum has recently written to the finance ministry with the plea to take the next course of action in this connection.

The state-backed bank borrowed the funds from the Bangladesh Bank (BB) under a bilateral deal with the latter.

Earlier, the finance ministry issued three-year state guarantee, which will expire on 11 August 2025.

It withdrew the allocation through three instalments. Of the amount, some 9.73 billion has been disbursed at an 8.0-per cent interest rate and loan activity is going on. It is supposed to make all loan payments on 26 July 2025.

The RAKUB has been operating agri and rural loan programme across the north and western regions by collecting deposits from different sources with 9.0-11 per cent interest rates.

The loans disbursed among the farmers are reinvested at the end of the term.

In this situation, small and marginal farmers will face a shortfall in capital. Agricultural production will also be hampered if pre-finance loans are given by collecting the disbursed loans from the farmers.

An official of the Financial Institutions Division said, "We're working on the issue and will make a decision to this end shortly."

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