The Bangladesh Bank on Thursday raised agricultural loan disbursement target for banks by 8.75 per cent to Tk 38,000 crore for the current financial year 2024-25 against the target of Tk 35,000 crore for the past financial year.
The central bank governor, Ahsan H Mansur, on the day announced its annual agricultural and rural credit policy and programme for the financial year 2024-2025, BB officials said.
They said that the target was set based on self-determined goals of state-owned banks and by calculating approximately 2.5 per cent of the net loans and advances of private and foreign banks, consistent with the country’s agriculture-friendly policy.
The policy may be considered as an important tool for achieving the country’s economic growth and sustainable development, they said.
They said that the central bank set the farm loan release target to increase agricultural production to control inflationary pressures and achieve gross domestic product growth target.
Mansur said that the farm loan policy did not reflect the current flood situation in the country.
The central bank would issue separate circular to accommodate the flood impact.
With the increased demand for farm loans, the BB set the target for state-owned commercial and specialised banks at Tk 12,615 crore and for private and foreign banks at Tk 25,385 crore, the officials said.
Additionally, 60 per cent of the total target must be allocated to crops and grains, 13 per cent to fisheries and 15 per cent to livestock.
The BB included some new crops in the agricultural loan plans.
It has also included Shariah-based banks in the rural and farm loan scheme to enable them to invest in agriculture.
To achieve these targets, banks can use their own networks — branches, sub-branches, agent banking, contract farming and group lending — and the bank-MFI linkage.
However, the amount of loans disbursed through the banks’ own networks must not be less than 50 per cent.
They also said that the central bank was giving the loan support to strengthen the agricultural and rural economy in the country.
To ensure that unmet agricultural and rural loan targets are invested back into the agricultural sector, the Bangladesh Bank has established the ‘Bangladesh Bank Agricultural Development Common Fund’.
Banks failing to meet their targets must deposit the unmet portion in this fund, where they will earn 2 per cent interest.
The funds deposited into this common fund will be disbursed to customers through banks that meet their targets, under the agricultural and rural loan policy.
Banks disbursed Tk 37,154 crore in agricultural and rural loans in the past financial year, surpassing the target of Tk 35,000 crore by 106.15 per cent compared with Tk 32,830 crore disbursed in the previous financial year.
