Bangladesh Bank (BB) has decided to make a fund titled 'Bangladesh Bank Agricultural Development Common Fund (BBADCF)' in a bid to increase farm production.

Under the initiative, banks would deposit money equivalent to the undisbursed amount of farm and rural loans in the fund and the BB would give 2 per cent interest on the deposits, as per a BB circular issued today (Dec 19).

The funds of the BBADCF would then be distributed among banks in proportion to their capacity. Banks would pay back the loans to the BB, along with 2 per cent interest, within 18 months of the fund release.

Banks can charge 8 per cent interest on the loans given to farmers using the money from the BBADCF. The loans have to be disbursed using banks' own network, not through microfinance institutions, said the notice.

Banks would be allowed to transfer 4 percentage points of the interest to their income segment on the loans made from the fund.

BDST: 1832 HRS, DEC 19, 2022
MSK/SMS