The target for farm loan disbursement goes up 6.54 percent year-on-year to Tk 15,550 crore in the current fiscal year.
Bangladesh Bank Governor Atiur Rahman announced the target at a meeting with senior bankers from private, public and foreign banks at his office in Dhaka yesterday.
Four state-owned banks -- Sonali, Janata, Agrani and Rupali -- will have to lend at least Tk 2,740 crore and two specialised state banks -- Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank -- at least Tk 6,400 crore.
Private and foreign banks have to lend 2.5 percent of their total loans to the agriculture sector, and the rate is 5 percent for nine new private commercial banks, according to the new agriculture loan policy and programmes for fiscal 2014-15.
“Banks that will fail to meet the target will have to deposit their undisbursed amounts with the BB and will get return at bank interest rate (5 percent) only,” Rahman said.
On the other hand, those who will meet the target will get priority in opening new and authorised dealer branches, he said.
The central bank for the first time in fiscal 2007-08 had set the farm loan target for private banks, which previously had made hardly any investment in the sector, blaming their absence in rural areas.
“We had to spend $1 billion or more for import of rice 4-5 years ago. We didn't need to import any rice in the last three years,” the BB governor said.
The new farm credit policy encouraged banks to lend more to rural areas, especially to farm-based industries and for the use of technology in the agriculture sector.
Contract farming, renewable energy and compost and organic fertiliser have also been given priority in the new policy.