Dhaka, Bangladesh (BBN)– The central bank has announced an agricultural and rural credit policy and programme with a disbursement target of BDT 164 billion for this fiscal year (FY), projecting around 5.5 per cent growth over that of the previous fiscal.
“The banks will have to take necessary initiatives for achieving the agricultural loan-disbursement target by ensuring proper use of such loan through strengthening their monitoring across the country,” Bangladesh Bank (BB) Governor Dr Atiur Rahman said while announcing the policy at the central bank headquarters in the capital Dhaka on Monday.
The central bank chief also asked the banks to bring qualitative and quantitative changes in agricultural credit through establishing a sustainable agricultural credit system for ensuring hassle free credit to farmers.
“We’ve to increase farm and rural credit and bring farmers into the banking system,” BB Governor DR. Rahman told chief executive officers (CEOs) and managing directors (MDs) of the commercial banks at the meeting.
The governor also asked the bankers to encourage cultivation of import-substitute crops.
The central bank chief also reminded the bankers that the 10-taka bank accounts for farmers were not introduced to disburse subsidies only. “These accounts must be run like any other bank accounts.”
Dr. Rahman sought cooperation from the CEOs and MDs of the commercial banks in expediting the ongoing ‘financial inclusion’ programmes alongside development of the agriculture sector for achieving sustainable economic growth.
He sounded a note of caution: “If any bank fails to achieve the target, it (the bank) will have to deposit the funds with the central bank to the unachievable part of the target. The central bank will not provide any interest for the deposit.”
Of the total target, BDT 28.90 billion will be disbursed by six state-owned commercial banks during the fiscal year (FY) 2015-16 while two specialised development banks will lend BDT 64 billion to the interested farmers.
Besides, 38 private commercial banks will lend BDT 67.17 billion while nine foreign commercial banks disburse BDT 3.93 billion, according to the new farm-credit policy.
Meanwhile, the disbursement of farm credits crossed the target in the FY 15 as the central bank has strengthened its monitoring and supervision of the lenders.
All banks have achieved nearly 103 per cent or BDT 159.78 billion of their annual agriculture loan-disbursement target, which has been fixed at BDT 155.50 billion in total for the FY 15.
A total of 3.194 million farmers received agriculture and rural credit in the immediate past fiscal year.
Of them, 2.543 million were small and marginal farmers who got BDT 112.03 billion or 70 per cent of the total loans, while 2,56,000 sharecroppers got BDT 9.14 billion and 2,66,000 women received BDT 9.01 billion.
BB Deputy Governor SK Sur Chowdhury advised the banks to take necessary measures to develop marketing channel for ensuring fair prices of farm produce.
He also said the banks must disburse the agriculture loans within the shortest possible time without any hassle to farmers.
The deputy governor also drew attention regarding increased agricultural production following disbursement of such loans in last two years as agricultural credit contributing a lot in alleviating poverty. “We’re now exporting rice to different countries including Sri Lanka, Nepal and Indonesia.”
Executive Director of the BB Subhankar Saha said the agricultural and rural credit policy and programme is formulated in line with the government policy to achieve self sufficiency in food production in Bangladesh.
General Manager of the Agricultural Credit and Financial Inclusion Department (ACFID) of BB Provash Chandra Mollick mentioned that timely disbursement of agricultural credit is very important as most of the farmers are in subsistence level in the country.
In this regard, he asked the banks to accomplish their agriculture and rural credit program by achieving credit disbursement target according to the BB’s rules and regulation.
Among others, CEOs and MDs of Sonali Bank Limited Pradip Kumar Dutta, BRAC Bank Limited Syed Mahbubur Rahman, Trust Bank Limited Ishtiaque Ahmed Chowdhury, IFIC Bank Limited Shah A Sarwar and Dhaka Bank Limited Niaz Habib also spoke on the occasion.