The BB extended the deadline for smooth implementation of the incentive fund for the agriculture sector
The Bangladesh Bank (BB) on Sunday extended the deadline by three months to December 31 for disbursement of the Tk5,000 crore stimulus fund announced for the agriculture sector.
The BB extended the deadline for smooth implementation of the incentive fund for the agriculture sector, says a BB circular issued on the day.
“We extended the deadline as banks have not made much progress in disbursing the stimulus fund for the farm sector due to various reasons,” said Ashok Kumur Dey, executive director of the BB.
Six banks have not yet disbursed any fund from the Tk5,000crore stimulus for the agriculture sector, although the sector is being badly affected by the protracted pandemic and prolonged flooding.
Other scheduled banks, however, have disbursed only Tk1,114.16 crore farm credit among 46,815 farmers from the stimulus package till August, according to the latest data from the BB.
Janata Bank, One Bank, Union Bank, Bangladesh Commerce Bank, Modhumoti Bank and Shimanto Bank are yet to disburse a single penny till August, the BB data show.
As many as 43 banks in April signed participation agreements with the BB on disbursing farm credit from the low-cost stimulus fund. The BB also set separate targets for those banks to disburse the low-cost loans.
High officials at the BB expressed their dissatisfaction over the slow disbursement of loans to the agriculture and CMSME sector from the stimulus funds at a virtual meeting with the banks on September 02.
To tackle the economic losses caused by the outbreak of the deadly virus, on April 14 the BB launched a Tk5,000-crore stimulus fund for the agriculture sector. The tenure for the loans was set at 18 months, including a grace period of six months.
Banks will borrow the funds at 1% interest rate and will lend at 4% to farmers in line with the BB guidelines.
The stimulus fund did not reach the marginal farmers due to collateral issues and bureaucratic complexities in the banks, according to experts.