BB lowers farm loan interest cap

The central bank yesterday cut the interest rate ceiling for farm loans by 2 percentage points to 11 percent in the wake of declining loan disbursement this fiscal year.

Disbursement dipped 3.86 percent year-on-year to Tk 5,288.27 crore during July-November, according to Bangladesh Bank.

The BB set a farm loan target at Tk 15,550 crore for this fiscal year.

In the five-month period, state-owned commercial banks—Sonali, Janata, Agrani and Rupali—and two specialised banks—Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank—together disbursed Tk 2,996.72 crore as farm loans. The amount is 32.79 percent of their annual loan disbursement target of Tk 9,140 crore.

Private and foreign banks gave out Tk 2,291.55 crore, which is 35.72 percent of their annual target of Tk 6,410 crore.

The interest rate ceiling was set at 13 percent in 2011.