BB revises Tk 3,000 agri-refinance scheme for northern region

Bangladesh Bank (BB) yesterday revised several provisions of its Tk 3,000 crore refinancing scheme aimed at creating a special economic centre based on agriculture in the northern region of the country.

Under the revised provision, participating banks will receive refinancing facilities from Bangladesh Bank at an interest/profit rate of 3 percent.

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At the customer level, the interest/profit rate will be a maximum of 7 percent.

For Shariah-based financing, the profit rate charged to customers will have to be determined in accordance with the approved investment policy, but it cannot exceed 7 percent.

The rate will be applicable equally to all customers.

The circular also revised the tenure of loans and investments under the scheme.

For eligible sectors or projects, loans or investments provided to customers, including a three-month grace period where applicable, will have a maximum tenure of 18 months.

Participating banks must repay the principal and interest or profit to Bangladesh Bank within a maximum of 18 months from the date of receiving refinancing.

For loans or investments under other specified sectors or projects, including a grace period ranging from three to six months where applicable, the maximum tenure will be 36 months.

Participating banks must repay the principal and interest or profit to Bangladesh Bank within a maximum of 36 months from the date of receiving refinancing. Bangladesh Bank also specified a provision for recovery in cases of misuse of the refinancing facility or charging customers an interest/profit rate above 7 percent.

If such irregularities are identified, the bank concerned will have to pay an additional 2 percent interest/profit over the prescribed rate on the relevant amount as a one-time recovery.

The participating banks have also been instructed to publicise the concessional loan facility by displaying banners inside and outside their branches at easily visible locations and through special campaigns.

The central bank said all other provisions of the earlier circular will remain unchanged and instructed banks to implement the revised directions immediately.