Easy loans for salt farmers at 4% interest

Salt farmers will now get loans on easy terms at only 4% interest with a rebate under the central bank's Agricultural and Rural Credit Policy.

The Agricultural Credit Department of the Bangladesh Bank issued a circular in this regard on Sunday.

According to the circular, the loan will be given under a rebate facility interest rate during the salt harvest season (from November to May) in suitable coastal areas.

Loans will be disbursed on an individual and group basis to genuine salt producers, according to the directive.

According to central bank calculations, a salt producer spends a maximum of Tk1,53,500 on one acre, including land rent and water pumping costs.

The borrower has to repay the loan within a maximum of 12 months from the month of loan disbursement.

Salt producers who own land can secure the loan under the rebate facility by submitting the copy of ownership documents and salt produced as collateral.  

Sharecroppers must be approved by the land owner and local dignitaries.

Salt producers need only produce their agricultural equipment assistant cards and details of bank accounts opened with Tk10.

No concessional interest will apply if any loan is wholly or partially unpaid at the end of the stipulated term of the disbursed loan. In this case, the normal interest rate determined by the bank will be applicable from the date of loan disbursement.

Banks shall apply for interest compensation at the rate of 4% to Bangladesh Bank within one month of the end of the respective financial year against the loan balance after collection and adjustment of the loans disbursed at rebated interest.

Bangladesh Bank will determine the amount of interest compensation due by on-site verification of 10% of the borrowers. The central bank will pay the interest loss to banks from its own account and arrange for replenishment from the finance ministry.