36 banks to get Tk 20m as interest subsidy

Dhaka,  Wed,  23 August 2017
Published : 16 Jun 2017, 22:19:05
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Spl farm credit

36 banks to get Tk 20m as interest subsidy

The government gives subsidy to the banks at a rate of 6.0 per cent interest while the farmers pay interest on special farm loan at a 4.0 per cent rate. Earlier, the government re-fixed the interest rate at 4.0 per cent from the previous rate of 2.0 per cent on special agricultural credit to be disbursed among the farmers for cultivation of pulses, oil seeds, spices and maize.
FE Report


The government has consented to provide over Tk 20 million as interest subsidy on special agricultural credit to 36 scheduled banks, officials said.

Disbursement of special agricultural credit (SAC) to increase the production of spices, pulses, maize etc is not at satisfactory level as the farmers are reluctant to avail of the bank loan facilities for not to get expected market prices of their produce, they said.

The finance division has, however, tagged some conditions for using interest subsidy. The fund must be used only as interest subsidy and transparency has to be ensured in this regard, according to a finance division source.    

The government gives subsidy to the banks at a rate of 6.0 per cent interest while the farmers pay interest on special farm loan at a 4.0 per cent rate.

Earlier, the government re-fixed the interest rate at 4.0 per cent from the previous rate of 2.0 per cent on special agricultural credit to be disbursed among the farmers for cultivation of pulses, oil seeds, spices and maize.

According to the Department of Agriculture Extension (DAE), Bangladesh imports over 50 per cent of its total consumption of spices. The loan is being given to discourage import of these items and reduce annual import payment of over Tk 25 billion.

Cultivation of spicy crops is increasing in the country with the farmers availing of the credit facility, a source concerned said.

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