The country's commercial banks will disburse Tk 175.50 billion in the countryside this fiscal year under an agricultural and rural credit policy and programme announced Sunday.
As per the new policy, unveiled by the central bank, all local private commercial banks (PCBs) will have to disburse minimum 30 per cent of their total targeted farm loans direct through their own networks from the current fiscal year (FY), 2016-17.
The credit projection accounts for around 7.01 per cent growth over that of the previous fiscal.
Bangladesh Bank (BB) Governor Fazle Kabir declared the policy formally at a meeting with chief executive officers and managing directors of all scheduled banks at the central bank headquarters in the capital.
"The BB will intensify monitoring and supervision from this fiscal to ensure proper disbursement of the agriculture credits," the new central bank chief said while speaking at the meeting.
He also said if any bank failed to achieve the target, that bank would have to deposit the funds with the central bank from the unachievable part of the target.
The BB will not provide any interest for such deposit, he added.
In the FY 16, 45 banks out of 55 achieved their targets while 10 failed, according to the BB officials. ICB Islamic Bank Limited, a PCB, has been excluded from the list of agricultural and rural credit disbursement.
At the meeting, the banks were asked for taking effective measures to achieve the agricultural loan-disbursement target by the end of this fiscal, according to the officials.
The agriculture credit target has been fixed at Tk 175.50 billion, which is lower by Tk 960 million from the disbursement amount of the FY 16.
"It's a realistic target that will be achievable by the end of the FY 17," SK Sur Chowdhury, deputy governor of the BB, told reporters after announcing the policy.
Of the total target, Tk 28.90 billion will be disbursed by six state-owned commercial banks during the fiscal year (FY) 2016-17 while two specialised development banks will hand out Tk 64 billion to the interested farmers.
Besides, 38 private commercial banks out of 39 will lend Tk 78.27 billion while nine foreign commercial banks will disburse Tk 4.33 billion, according to the new policy.
The loans will be given to 119 different agro and rural sectors that include crop, fisheries, livestock, agricultural and irrigation equipment, solar irrigation system, high-yielding variety of crops, tissue culture, jute cultivation, nursery, marginal and small farmers, sharecroppers, salt and betel-leaf cultivation, apiculture, mushroom cultivation, handlooms, silk industry, cotton cultivation, rural finance, credit to women engaged in income-generating agriculture and allied agricultural activities.
Meanwhile, the disbursement of farm credits crossed the target in the last fiscal for persuasion of the bankers by the central bank.
All banks achieved nearly 108 per cent or Tk 176.46 billion of their annual agriculture loan disbursement target, fixed at Tk 164 billion for the FY 16, the BB data showed.
"The local private commercial banks may use agent-banking networks to disburse minimum 30 per cent of their total targeted farm loans in line with the new policy," Mr. Sur Chowdhury said while replying to a query.
He also said the central bank has imposed such disbursement condition to ensure credit with lower interest rates for interested framers across the country.
"The foreign commercial banks have been excluded from complying with the provision for the FY 17 as they have no available branches in the rural areas," the deputy governor explained.
Replying to another query, he said more than 3.42 million farmers availed such credits cross the country in the last fiscal year.
 Anis A Khan, chairman of the Association of Bankers, Bangladesh (ABB), advised the banks to expedite their agriculture loan disbursement through agent banking networks.
Among others, Executive Director of BB Shubhankar Saha and General Manager of Agricultural Credit Department of the central bank Provash Chandra Mallick also spoke on the occasion.
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Source: The Financial Express