BB raises farm loan targets for banks

The central bank has raised the farm loan disbursement target by 6.86 percent to Tk 21,800 crore for the current fiscal year compared to a year ago.

“The farm loan target has been increased considering the rising demand for agriculture and rural credit,” said SM Moniruzzaman, a deputy governor of the Bangladesh Bank, while unveiling the Agriculture and Rural Credit Policy and Programme for 2018-19 at the central bank on Tuesday.

Banks will have to disburse a minimum 10 percent of their agriculture loan to the fisheries sector, the new inclusion in the agriculture credit policy.

Some new sectors were also brought under the agriculture loan. They include the floating agriculture system, the integrated farming system, rearing of turkey birds and fish farming through the pen system.

The lending target for state banks has been set at Tk 9,875 crore and for the private and foreign commercial banks at Tk 11,925 crore.

Banks disbursed Tk 21,393 crore last fiscal year, which was about 105 percent of the target.

They disbursed agricultural and rural credit among 39.62 lakh borrowers. Of them, the number of women borrowers was 15.76 lakh, receiving Tk 6,309 crore, according to the central bank data.

Small and marginal farmers borrowed about Tk 15,092 crore in 2017-18. Besides, Tk 30.47 crore was disbursed among 8,339 farmers in char, haor and less developed areas.

The central bank imposes penalty on banks if they fail to achieve the disbursement target.

If a private commercial bank can't achieve its goal in a fiscal year, it will have to deposit the unachieved portion of the target to the central bank. If the bank can disburse the unachieved portion fully or partly in the next two years, the deposited amount is refunded. Otherwise, the deposited amount is not refunded.