Farm loan can be rescheduled without down payment

Farmers from now on will be able to reschedule short term agricultural loans without any down payment for three years, the Bangladesh Bank said in a new instruction issued on Tuesday.

The special relaxation has been provided to speed up agricultural production and curtail the rise in commodity prices, the bank said.

The new regulations issued by the central bank's Banking Regulation and Policy Department, took effect yesterday and will remain in force till 31 December 2022.

The central bank said import costs have risen in international markets recently due to a price hike of various agricultural materials and rising transportation costs.

Entrepreneurs in the agriculture sector need to bring more dynamism to their production activities to curtail the price hike of agricultural products in the domestic market, the bank said.

Therefore, the central bank added, new guidelines have been issued for rescheduling short-term agricultural loans to make loan repayment easier and to maintain a steady credit flow in the sector.

Under the new guidelines, short-term agricultural loans can be rescheduled for a maximum of three years with a grace period of six months from the date of rescheduling with a down payment on the basis of a banker-customer relationship.

Such loans can also be rescheduled without a down payment in some special cases.

After rescheduling loans, banks will be able to give new loans to borrowers in this sector without any new deposits.

For borrowers facing certificate cases, banks will have to stop the procedural process of cases or settle them based on an agreement with the borrower.

The new facility will also apply to short-term agricultural loans rescheduled earlier.