BB: Farmers to get loan rescheduling without down payment

Bangladesh Bank (BB) hasdirected banks to reschedule short-term agriculture loanswithout any down payment under “banker-client” relationship.

The central bank issued the directive in a circular sent to CEOs and managing directors of scheduled banks on Monday. The facility will continue until December next year. 

A similar rescheduled loan policy was announced on February 23, 2015 which continuedtill December2015, according to the circular. 

The circular reads: “As a natural disaster-prone country, farmers are victims of untold sufferings due to floods, droughts, tidal bores, and extreme rainfall. Due to  that, many farmers failed to repay loans even with the former reschedulingfacility. This resulted in a large amount of loanscoming under threat of default.”

Hence, BB has again decided to rescheduleagricultural loans for farmers, considering the importance of the agriculture sector to the national economy.

According to latest data by BB, disbursements of agriculture loans by banks dropped by 13.74% in the July-October period of the current fiscal year (FY19), compared to the same period in FY18.

During the period, state-owned, private and foreign scheduled banks disbursed Tk5,352.07 crore in the first four months of FY19, against Tk6,204.76 crore in the corresponding period of FY18. 

The amount of agriculture loans disbursed by banks in July-October of FY19 was 24.55% of the annual target of Tk21,800 crore for the fiscal year.