Bangladesh Bank Governor Ahsan H Mansur yesterday urged banks to be compassionate, humane and empathetic when dealing with farmers who fail to repay loans for genuine and understandable difficulties.

"…to understand the situation farmers are in, put yourself in their shoes," he said, quoting a former official of International Monetary Fund (IMF).

"If we look at the situation from the farmer's angle, we will automatically behave humanely," he added.

He was responding to a journalist citing instances of farmers being harassed by being handcuffed and tied with a rope around the waist when being taken to court for failing to repay loans of Tk 5,000 to Tk 1,000.

Meanwhile, people defaulting on substantial amounts of loans are going scot-free, said the journalist.

"Borrowers should be viewed through the humanitarian lens. Because anyone can fall in difficulties at any time irrespective of whether they are big or small (in terms of wealth and influence). So, the humanitarian aspect is very important," said Mansur.

There could be cases where a farmer's death or any other difficulty was causing suffering for his family due to his loans, he said.

"Will it be useful by harassing the family members by putting rope around their waist?" he asked.

Borrowers can default on loans for a variety of reasons and strict enforcement of the law may not always be reasonable, he said.

Loans which farmers are genuinely unable to repay should be written off instead of being kept in the records for years, said Mansur.

"I would say that the matter should be resolved humanely on getting to know about the genuine reason," he said.

Mansur further said farmers often end up requiring assistance when intending to avail loans and this is where they fall victim to harassment from "brokers".

So, banks should ensure that they reach the loans directly to the farmers, he said.

"We will conduct a study on whether the brokers are getting the loans or the farmers to understand the ground reality. Then, we will take steps accordingly. The brokers will be dealt with an iron fist if necessary," he said.

The interaction took place at the central bank, which announced the Agricultural and Rural Credit Policy for FY25, by setting a target for disbursing Tk 38,000 crore in loans for agricultural and rural development in fiscal year 2024-25.

The target is 8.57 percent higher than that of the previous year.

Banks disbursed Tk 37,154 crore in agricultural and rural loans against a target of Tk 35,000 crore last fiscal year, meaning they exceeded the target by 6.15 percent.

Of the loan target set for the ongoing fiscal year, the state-owned commercial and specialised banks have been tasked with disbursing Tk 12,615 crore while private and foreign commercial banks Tk 25,385 crore.

A bank must use its own networks, such as branches, sub-branches and agent banking, contract farming or any other relevant linkage to achieve at least 50 percent of its credit disbursement targets.

The rest can be disbursed through its partnerships with other lenders.

Moreover, 60 percent loans should go to the crop sector, 13 percent fisheries and 15 percent livestock.

Managing directors of various banks and officials of Bangladesh Bank were present on the occasion.