deciding the courses of action for adapting to the impact of climate change.
keeping the price level of foodstuff within the purchasing power of the mass people through increasing agricultural production.
Considering the importance of food security and employment of the country, Bangladesh Bank designing agricultural credit policy and programme since 1977 and implemented through nationalized and specialized banks.
From the FY 2008-2009 all private and foreign commercial Banks along with nationalized and specialized banks are advised to disburse agri/rural credit .
BB made mandatory for all banks to disburse a specific percent of their total loans & Advances in agriculture and rural sector from FY 2011-2012.
Foreign and Private commercial banks which have limited branch coverage in rural areas are advised to provide agricultural & rural credit in partnership with the micro-finance institutions (MFIs).
To ensure that the bank funds disbursed through MFI partnership goes in agriculture, it is considered as disbursement by bank only when the fund is disbursed to the actual borrowers and not the Micro-Finance Institutions (MFIs)
Low Interest Rate in Agricultural & rural Financing
Interest rate cap for agricultural & rural credit for banks is currently 13% on reducing balance method.
Achievement & Success of Bangladesh Bank
Disbursements of agricultural credit rises from Taka 92.84 to 131.37 billion respectively from FY09 to FY12.
A specialized department exercises oversight on hassle free credit disbursement and other customer interest protection issues.
Mobile phone based financial service delivery processes.
Facilitate cost effective agricultural credit delivery and recovery to and from farmers in remote areas.
More than 9.5 million accounts of farmers have been opened by the State-owned Banks with an initial deposit of Tk. 10/- only (<20 cents).
Target Achievement Trend in last 5 years
Sector-wise Agricultural and Rural Credit Disbursement in FY 2011-12
Credit (against the interest loss subsidy provided by government) shall be made available on easy terms to the salt cultivators at a concessional rate (4%) from FY 2010-11 in the coastal belts of the country.
No. of Farmers
(amount in million taka)
Special Credit towards women
In financial year 2011-12 an amount of Tk. 5.31 billion were disbursed among 0.27 million women as agricultural and rural credit for crop production, running agro processing and agricultural related small business & activities, so that they can change their economic conditions.
Credit towards tribal farmers in Hill Tracts Areas
During FY 2011-12 around 273.90 million taka was disbursed only at 5% interest rate among about 13100 tribal farmers of Bangladesh.
Special Credit program in supporting of Agricultural and rural development
An ADB assisted crop diversification credit project is extending credit for growing of higher value crops (vegetables, fruits, flowers, spices, oilseeds) in the country’s poverty ridden North-Western region through whole selling of MFI (BRAC).
Agricultural assistance through CSR(Corporate Social Responsibility) Program
CSR actions aim at mitigate the diverse environmental impacts of the activities of the business and at reducing inequalities and alleviating deprivation and poverty in the communities across the country.
Bangladesh Bank (BB) issued a detailed directive titled "Mainstreaming Corporate Social Responsibility (CSR) in banks and financial institutions in Bangladesh“.
From the year 2009, 2010, 2011 & 2012 all banks disbursed an amount of Taka 550 million , 2330 million, 2190 million and 3046.69 million respectively in CSR program
Banks are advised to distribute free crops seed like oil pump, strawberry, baul kool, appel kool etc. to the farmers.
Some banks are disbursing interest free agricultural credit towards share croppers landless farmers in cyclone affected areas.
ADB fund for improving brick kiln efficiency
A refinance scheme (ADB funded) for 50 million USD is ongoing to improve the efficiency of existing brick kiln for reducing carbon emission.
Monitoring of agricultural credit
To ensure timely and hassle-free disbursement of agricultural Credit to real farmers BB has set up three-tier monitoring system. Such as:
Participating banks will establish a separate monitoring system.
The branch Offices of the participating banks shall visit the farmers regularly, and arrange group discussion.
Head office of participating bank shall arrange fortnightly/monthly evaluation of the overall agricultural credit disbursement and recovery position and give necessary instruction to branches/regional offices.
Monitoring by Branch offices of BB
Every branch office of BB has a monitoring cell.
They collect & evaluate the comprehensive statement regarding agricultural and rural credit disbursement and give necessary instructions to the regional office of the banks.
BB officers from Branch office attend in the meeting with government representative.
Representative from BB branch visit the farmers and the branch office of participating bank.
Finally branch office of BB send their findings to HO.
Monitoring by Head offices of BB:
Collection of Basic Information of Loan disbursement & recovery of individual bank through prescribed Form.
Developing of broad Database for agricultural credit.
Review and analysis of Data.
Giving some instructions and decisions on the basis of review and analysis.
On site supervision:
Visit bank branches and their borrowers on sample basis.
Coordinate with BB branch office monitoring cell of BB branch offices.
Monitoring through District Agricultural Credit Committee.
Meeting with senior Officials of participating banks.
Success in agri & rural-credit will be awarded by:
Depositing the shortfall amount of total target in BB for 1 year.
Reward & punitive measure for
The developmental role played by BB indicate that this role of a central bank can be carried out without conflict with the primary role of preserving monetary and financial stability. Central bank’s developmental role, therefore, act as an in-built stabilizer of the financial system; helping avert situation like those creating the global financial crisis of 2008-2009.