Dhaka, Bangladesh (BBN) – The central of Bangladesh bank may extend re-financing facilities to private commercial banks (PCBs) for strengthening disbursement of agricultural credit across the country.

“We may provide re-financing facilities to the PCBs after examining important indicators like liquidity position of the bank concerned,” a senior official of the Bangladesh Bank (BB), the country’s central bank, told BBN in the capital, Dhaka on Sunday.

The central bank has made it mandatory for all local and foreign commercial banks to disburse agricultural credit from this fiscal to help ensure food security of Bangladesh, according to the official.

Board of directors of the central bank has already approved BDT 5.0 billion and BDT 2.0 billion for Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnayan Bank (RAKUB) respectively for fiscal 2008-09.

“The central bank will release the funds to the banks after receiving guarantee, issued by the ministry of finance,” the official noted.

The BB had provided the same amount of the re-financing facilities to two specialised banks for fiscal 2007-08, he added.

“No banks and financial institutions availed of re-financing facilities from the BB in FY07,” the central bank said in its annual report for 2006-07.

An amount of BDT 3.47 billion was recovered against the past re-financing loan due from different banks and institutions leaving an outstanding balance of BDT 55.07 billion at the end of June 2007 for further recovery, according to the annual report.

The central bank has already relaxed its credit policy aiming to facilitate disbursement of agriculture loans to sharecroppers and landless farmers across the country.

Under the new policies, sharecroppers, who are directly engaged in farming, will be entitled to receive agriculture loan.

It has also introduced a ‘Revolving crop credit limit system’ for a three-year term to gear up disbursement of the farm loan.

BBN/SI/SSR/AD-30November08-8:41 PM (BST)