Bangladesh Bank on Tuesday reduced the rate of provisioning against unclassified agriculture loan and micro-credit to 2.50 per cent from existing 5 per cent for scheduled banks to encourage banks’ participation in disbursing more agriculture loans and micro-credits.
The BB issued a circular to managing director and chief executive officer of all banks in this regard.
The BB, however, kept unchanged the provisioning rate for three types of classified farm loans and micro-credits.
The banks have to keep 5 per cent provision against sub-standard and doubtful farm loans and micro-credits and 100 per cent against bad loans.
The banks have to keep provision on mandatory basis against all types of classified and unclassified loans to absorb unexpected shocks, the BB official said.
Under the micro-credit, the marginal people in rural areas can receive a maximum Tk 50,000 from banks to boost up their productive activities, a BB official told New Age on Tuesday.
-With New Age input
