Dhaka, Bangladesh (BBN)- The central bank of Bangladesh has asked all private commercial banks (PCBs) and foreign commercial banks (FCBs) to fix agriculture credit disbursement target at least at 2.5 per cent of their total loans from the next fiscal year.
"The central bank has taken the latest move aiming to ensure food security through boosting farm credit disbursement across the country," a senior official of the Bangladesh Bank (BB) said, adding that the new directive on agriculture credit disbursement will come into effect from July 1, 2011.
As many as 30 PCBs and nine FCBs are now operating their business in the South Asian country.
Under the new provisions, progress of the agriculture disbursement will be reviewed quarterly and if any bank fails to meet the quarterly target, it will have to deposit the remaining fund to the central bank for one year.
"But if the total disbursement of farm credit of a bank is above 2.5 per cent of its total lending, there will be no remedial measures even if the target is higher," the BB said in the circular, issued on Monday.
The BB's latest move came against the backdrop of lower farm credit disbursement by some private and foreign commercial banks, the central bank official said.
"At least eight private commercial banks did not achieve 20 per cent of their annual farm credit disbursement targets over the first nine months of this fiscal," another BB official said.
BBN/SSR/AD-17May11-9:12 pm (BST)
