Bangladesh Bank asks all scheduled banks to open agriculture credit cells

Bangladesh Bank has instructed all scheduled banks to open separate agriculture credit divisions or cells to give more attention to the sector.

The central bank issued a circular to this effect on Tuesday asking the scheduled banks to complete all formalities by July 7 to open the divisions and inform it of the progress.

The circular says agriculture loan disbursement and realisation and other related activities need intensive monitoring and more supervision.

That’s why a separate division or cell has to be constituted in the head office of each bank with necessary manpower.

At least one officer must be assigned to every branch to carry out the agriculture loan-related activities, it adds.

State-owned Sonali, Janata and Agrani banks already have separate agriculture loan divisions while Krishi Bank and Rajshahi Krishi Unnayan Bank are specialised in agriculture credit.

The circular was sent to the chief executives of all private and foreign banks, state-owned Rupali Bank and specialised BASIC Bank.

It says the division will conduct activities such as selection of clients, preparation and evaluation of loan proposals, approval, disbursement, supervision and collection of credit and participation in meetings of district- and Upazila-level agriculture loan committees.

Thirty-nine private and nine foreign banks are operating in Bangladesh.

The central bank had fixed the agriculture credit disbursement target at Tk 155.5 billion for the 2014-15 financial year, beginning on July 1.

The figure was 145.95 billion in the previous FY.

As per a Bangladesh Bank directive, farmers can now open a bank account with an initial deposit of only Tk 10.

The central bank has constituted a Tk 2 billion refinancing fund to extend credit to marginal farmers.