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Bangladesh Bank (BB) Governor Dr Ahsan H. Mansur has urged commercial banks to step up efforts in ensuring a steady flow of funds to farmers, calling agricultural finance vital for rural economic vibrancy and controlling inflation.
He said expanded farm lending would help strengthen food security, support rural livelihoods, and stabilise prices through higher crop output.
The central bank chief announced the Agricultural and Rural Credit Policy and Programme for fiscal year (FY) 2025-26 at a press conference at the BB headquarters on Tuesday.
The new policy raises the farm loan disbursement target by 2.63 per cent to Tk 390 billion.
Of the total, Tk 139 billion will be channelled through state-owned commercial and specialised banks, while private and foreign banks will disburse Tk 251 billion.
Currently, agro loans account for only 2.40 per cent of total lending in the financial sector, which Dr Mansur described as "very low" given the importance of the sector.
"We need to expand the credit facility to the farmers, which will be very essential as far as price stability is concerned," he stressed.
The policy prioritises financing for climate-resilient agriculture, mechanisation, crop diversification, and greater access for small and marginal farmers, women entrepreneurs, and climate-affected communities.
All scheduled banks must align their own annual agricultural credit programmes with BB guidelines and submit them within a set deadline.
Banks failing to meet targets will have to deposit the shortfall into the BB's Agriculture and Rural Credit Department, without interest, for refinancing to other lenders.
The policy also emphasises climate-smart agriculture and technological adoption, including financing for agricultural machinery, irrigation equipment, and renewable energy for farms. Women's empowerment and financial inclusion receive special focus.
The central bank has further instructed banks to simplify loan disbursement processes, ensure timely lending before planting seasons, and enhance monitoring to prevent fund misuse.
The event was attended by deputy governors, the BFIU chief, the central bank's chief economist, senior BB officials, and CEOs of scheduled banks.
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