Bangladesh Bank (BB) has taken a decision to form a fund, title 'Bangladesh Bank Agricultural Development Common Fund (BBADCF)' for increasing farm production.

Under the initiative, banks would deposit money equivalent to the undisbursed amount of farm and rural loans in the fund and the BB would give 2 per cent interest on the deposits, as per a BB circular issued on Monday, reports BSS.

18 months of the fund release.

Banks can charge 8 per cent interest on the loans given to farmers using the money from the BBADCF. The loans have to be disbursed using banks' own network, not through microfinance institutions, said the notice. Banks would be allowed to transfer 4 percentage points of the interest to their income segment on the loans made from the fund.