Dhaka, Bangladesh (BBN)- The central bank has slashed time limit for repayment of rice purchasing loan, received by rice millers and traders, to ensure smooth supply of the essential in local markets, officials said.
Under the new rules, the millers will have to repay their rice purchasing loans within 60 days instead of 90 days, while rice traders must repay their loans within 45 days.
The Bangladesh Bank (BB) issued a circular in this connection on Tuesday, asking all commercial banks to re-fix the repayment period for rice purchasing credit, received by millers and traders.
“The rules will be applicable for the loans, which were sanctioned or disbursed earlier,” the central bank said in its circular.
The BB has also asked the banks to inform the concerned department of the central bank after ensuring implementation of the directive properly.
The central bank has taken the move, as prices of rice have been maintaining an upward trend in the market. During the last one month, rice prices jumped by around 31 per cent.
Currently, the millers and traders take advantage of availing loans in the form of cash credit against pledge of rice.
“We’ve taken the latest measure to ease prices of rice by increasing supply of the essential item in the local markets,” a BB senior official said.
The central bank found that most of the banks did not comply with the rules, relating to 90-day repayment period for rice purchasing loans, he added.
The BB had set the 90-day repayment period for rice purchasing loans on May 12, 2008 to ensure smooth supply of the essential in local markets.
BBN/SS/SI/AD-24February10-1:45 am (BST)