Bangladesh Bank has introduced a Tk 10,000 crore refinancing scheme to increase agricultural production and create rural employment. The five-year scheme, funded entirely by Bangladesh Bank, aims to provide low-interest loans to farmers. A circular was issued to all scheduled banks last night. The loans will be given to genuine farmers and rural entrepreneurs to make them economically self-reliant, subject to certain conditions and rules.
Eligibility and Conditions
Small, marginal, sharecroppers, and women farmers will receive special priority. Genuine farmers will be identified using local agricultural, fisheries, and livestock departments or the government's 'farmer card' information. Small and marginal farmers can receive up to Tk 5 lakh without collateral, against crop liability. Women and marginal farmers can provide personal or group social collateral instead of immovable property. Defaulters will not be eligible. The loan cannot be used to repay old debts. A borrower can avail the scheme a maximum of three times.
Loan Limits and Interest Rates
The maximum loan limits are Tk 1 crore for fisheries and livestock, Tk 30 lakh for crops (up to 5 acres), Tk 20 lakh for agricultural machinery, and Tk 15 lakh for income-generating activities and other rural loans. The maximum interest rate is 8% (simple interest). For Shariah-based banking, the profit rate cannot exceed 8%. Banks will receive the fund at 4% interest. The scheme is renewable, meaning recovered funds can be re-lent. Banks must sign a participation agreement with Bangladesh Bank within a month of receiving the loan. Banks are responsible for loan recovery.
Monitoring and Penalties
Bangladesh Bank will impose a 2% penalty on banks that charge more than 8% interest or misuse the fund. If banks fail to repay on time, funds will be deducted from their current accounts with Bangladesh Bank.
