Bangladesh Bank (BB) has announced a refinancing scheme of Tk5,000 crore for farmers aiming to ensure food security.
Under this scheme, farmers will be provided with loans at an interest rate of only 4 percent, according to a BB circular issued Thursday.
Besides, banks will be able to borrow from the central bank at an interest of only 0.5 percent to provide farmers with loans under this scheme.
Farmers will avail loans under this scheme till 30 June 2024 with potential extinction in need, the notice added.
Banks must provide loans to farmers in accordance with the rules mentioned in the agriculture and rural credit policy.
Banks will get refinance facility at 0.5 per cent interest from the Bangladesh Bank.
The interest rate will be maximum 4 per cent at farmers’ end and the rate would be equally applicable for all clients.
The loans under the scheme can be disbursed in paddy cultivation, fisheries, crops, fruits and livestock sector.
The banks must repay the principal and interest of the loans to the Bangladesh Bank within maximum 18 months after receiving the refinance.
The maximum tenure of the loans at the farmers’ end will be 18 months with 3 months grace period.
The banks must have proper monitoring policy and plan to ensure proper utilisation of loans by farmers.
The banks must inform the central bank about the update of the refinance loans timely.
The central bank will routinely inspect and examine the utilisation of the loans.
