The banking regulator has increased the farm loan disbursement target this year by 5.5 percent to bring more farmers into the banking system.

The central bank has raised the farm loan disbursement target by 5.5 percent to Tk 16,400 crore for the current fiscal year compared to the target last year.

Bangladesh Bank Governor Atiur Rahman announced the target while unveiling the agriculture and rural credit policy for 2015-16 at a meeting at his office in Dhaka yesterday.

Nine new banks that started operations in 2013 have to disburse at least 5 percent of their total loans to the farm sector this fiscal year, which is 2.5 percent for private and foreign banks.

The disbursement target has been set at Tk 9,290 crore for state-owned and specialised banks and at Tk 7,110 crore for private and foreign banks.

“We have to increase farm and rural credit and bring farmers into the banking system,” Rahman told chief executives of banks at the meeting.

The governor asked the bankers to encourage cultivation of import-substitute crops.

He also reminded the bankers that the 10-taka bank accounts for farmers were not introduced to disburse subsidies only. “These accounts must be run like any other bank accounts,” he said.

If any bank fails to attain the disbursement target at the end of the fiscal year, it has to deposit an amount equivalent to the unattained portion compulsorily to the BB without any interest.

The central bank set a Tk 15,550-crore agriculture loan target for fiscal 2014-15, but disbursement surpassed the target and stood at Tk 15,978.46 crore.

But the target of Tk 95.5 crore meant for import-substitute crops could not be reached as only Tk 82 crore was disbursed.

A total of 31.94 lakh farmers received agriculture and rural credit in the immediate past fiscal year.

Of them, 25.43 lakh were small and marginal farmers who got Tk 11,203 crore or 70 percent of the total loans, while 2.56 lakh sharecroppers got Tk 914 crore and 2.66 lakh women received Tk 901 crore.

The recovery rate has been stagnant at around 70 percent for the last few years, according to BB data.

The banking regulator last year cut the interest rate for farm loans by 2 percentage points to 11 percent to encourage farmers to take bank loans.

Overall farm production increased to 4.5 crore tonnes now from 1.1 crore tonnes 40 years ago.

Md Sirajul Islam Varosha, Chairman, Board of Directors of Jamuna Bank Limited inaugurating the business review meeting of Sylhet Zone of the bank at Dusai Resort & Spa, Moulvibazar. Shafiqul Alam, Managing Director of the bank presided.

Shaikh Salahuddin, Chairman of the Board\'s Audit Committee of Modhumoti Bank Limited, presiding over the committee meeting at its Gulshan Branch in the city on Sunday. Md Abul Hossain, A Mannan Khan and Md Mizanur Rahman, Managing Director of the bank we

BSS, Dhaka :Bangladesh Bank (BB) Governor Dr Atiur Rahman on Sunday asked banks to bring down their default loans to a tolerable level soon."We need to continue our sincere efforts so the default loans would come down to a tolerable level soon", he told a programme where high BB officials and chief executives of banks and financial institutions were present. The programme was organised at the central bank headquerters to launch the BB's annual "Financial Stability Report 2015". Dr Rahman said the central bank has already taken many steps, updated rules and regulations and technology and streamlined the monitoring system to establish discipline and ensure stability in the banking sector."As a result, the capital base of the bank sector increased and strengthened significantly in the past five years", he said. He advised that the country's banking sector should be prepared to tackle spillover impact of global economic volatility as the future banking would have more integration with the global financial activities."Banks and financial institutions (in Bangladesh) did not face any systematic risk even during the global recession because the external economic activities still remained limited and under carefull management. But, there was no scope of self-satisfaction", said Dr Rahman.The governor said BB was continuing its efforts for building capacity and skills so it would be equipped well to tackle the spillover of risks of any volatility in the global financial market."Already, we have started developing a coordinated monitoring system to eliminate duplicity or overlapping (in monitoring), which would also bring more stability in the financial sector", he said.Besides, Dr Rahman noted that the central bank developed and incorporated modern technology, framework, contingency plan and other tools to determine the potential risks and remidies of those in banking and financial sectors.The governor, however, advised the banks and the financial institutions to be more careful and transparent in their operations to have people's condifence and trust, which were very important for developing a healthy banking and financial sectors. "We should remember that the banks would be required to take the challenges of the fast changing business model besides the big challenges of achieving inclusive and sustainable economic growth," he said.