BB eases agricultural loan rescheduling
Yesterday, the central bank asked banks to reschedule delinquent loans in the agricultural sector without any down payments as part of its efforts to protect farmers from the lingering economic hardships resulting from the coronavirus pandemic.
Banks will have to give farmers two years to repay rescheduled loans, according to an opinion from the banking regulator.
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Lenders can follow the banker-client relationship to reschedule delinquent loans.
Farmers will get new loans without repaying any portion of their rescheduled loans. Farmers facing “certificate cases” will also be considered for new bank financing.
Agreement will be needed between farmers and banks in order to withdraw or settle certificate cases.
Farmers who recently rescheduled their delinquent loans will also benefit from the central bank’s relaxed facility. The guidelines will come into effect immediately, which will remain in effect until March 31 of next year.
Defaulted loans in the agricultural sector stood at Tk 4,264 crore as of April 30 this year, up 4% year-on-year, according to central bank data.
Banks disbursed Tk 20,373 crore in agricultural loans in the first 10 months of this fiscal year, an increase of 17% from the previous year. The production and marketing activities of the agricultural segment like other sectors of the country have been disrupted since 2020.
As a result, it was not possible for many farmers to repay their bank loans on time.
In the event of non-payment of agricultural loans, the provision of new finance to farmers will be hampered, which will subsequently have a negative impact on agricultural production.
“In this context, such a situation may have a negative impact on GDP growth,” according to the Bangladesh Bank.