Bangladesh Bank (BB) will conduct a thorough study to see whether the farm credit goes to actual farmers, central bank governor Dr Ahsan H. Mansur has said.
The chief of the banking regulator said they often received allegations that the real farmers were not getting the agriculture credits.
"We need to do a complete study to see the real picture in this case and we'll do it to ensure proper targeting for increasing agricultural productions," the central bank governor said while unveiling its agriculture and rural credit policy for this fiscal year (FY'25).
Under the policy, the BB has extended its agricultural loan disbursement target through commercial banks for the ongoing fiscal year by 8.57 per cent year-on-year to Tk 380 billion.
The target has been raised in order to achieve gross domestic product (GDP) growth through increasing the production of agriculture in the country and to control inflation, according to the policy.
It said the central bank raised the loan disbursement target under its Agricultural & Rural Credit Policy and Programme by around 9.0 per cent from last fiscal year's target of around Tk 372 billion.
In the last fiscal, the banks distributed Tk 350 billion in the agriculture sector and it was some Tk 21.53 billion short of the target.
Considering the demand, the banking regulator has set a target of disbursing Tk 126 billion through state-owned commercial and specialised banks, Tk 241 billion through private commercial banks, and Tk 12.64 billion through foreign commercial banks.
Half of the total loans will be financed by the scheduled banks and the remaining half will be given through NGOs.
There are over 30 million people directly engaged in the agriculture sector, contributing 12 per cent of the country's GDP, according to the latest labour force survey of the country.
Managing Directors and Chief Executive Officers of the country's commercial banks were present in the policy unveiling programme where they placed several demands like curtailing the ceiling of provisioning of 0.25 per cent instead of the existing 1.0 per cent against farm credits and extending the credit guarantee scheme facility to the sector.
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