Bangladesh Bank has reduced the interest rates on both agriculture and rural credits and export-oriented pre-shipment support loans.

As per the new decision, the borrowers of the agriculture and rural credits will pay highest 8 percent interest instead of the existing 9 percent on their loans.

Besides, the borrowers of export-oriented pre-shipment credit will pay highest 5 percent interest instead of the existing 6 percent, said two separate circulars of the central bank.

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The circular, issued by the Banking Regulations and Policy Department, said the initiative for the agriculture and rural sector was taken as part of the support to bring back the productivity in the sector that was affected by the Covid-19 in 2020 like other sectors of the economy.

Mentioning the agriculture and rural sector as an important one for ensuring food security of the country, the circular said the new interest rate will be effective from April 1 this year.

It added that the highest interest rate for the sector was capped at 10 percent considering it a priority sector and then it was brought down to 9 along with all other interest rates except for credit cards from April 1 in 2020.

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The other circular, issued by the same department, said the interest on credit for the pre-shipment facilities was re-fixed at 5 percent instead of existing 6 percent to ensure soft loan for the sector to attain further growth in export business.

It mentioned that a Tk 5,000 crore re-financing scheme was launched in 2020 to support the export-oriented industries against the effect of the Covid-19 to continue earning of foreign currency and bringing pace in the economy. 

The circular said the banks will receive the loan from the central bank at a rate of 2 percent interest while they will disburse it at highest 5 percent interest with effect from April 1.

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