ACD Circular Letter No. 01: Strengthening loan disbursement activities under Milk Production and Artificial Insemination

Bangladesh Bank (Central Bank of Bangladesh) Head Office Motijheel, Dhaka-1000 Bangladesh ACD Circular Letter No. - 01 Date: 26/04/2017 Managing Directors / Chief Executive Officers Sonali / Janata / Agrani / Rupali / Basic / Barishal / IFIC / Midland National Bank Ltd: Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank, Anser-VDP Development Bank Commercial Banks, IDLC Finance Ltd. Head Offices Dhaka/Rajshahi. Regarding strengthening of loan disbursement activities under the Re-lending Scheme (Relending Scheme) for the purpose of providing loans at a concessional interest rate of 5% towards making Bangladesh self-sufficient in milk.

Dear Sir,

Reference is drawn to your attention to ACFID Circular No. - 02 dated: 02/06/2015; ACD Circular Letter No. - 03 dated: 25/08/2015 and ACD Circular Letter No. - 03 dated: 18/08/2016 regarding the subject mentioned above.

Despite the huge demand for milk to address nutritional deficiencies, the domestically produced milk is insufficient compared to the demand, resulting in significant foreign exchange expenditure on milk imports. In this context, steps have been taken to significantly increase the flow of loans in the dairy production and artificial insemination sectors under the aforementioned circulars at a concessional interest rate of 5% under the Re-lending Scheme (Relending Scheme) with the aim of making Bangladesh self-sufficient in milk.

It has recently been observed that the progress of most banks and financial institutions participating in the loan disbursement under the said Re-lending Scheme is not satisfactory. Furthermore, the instruction mentioned in the circular regarding the submission of monthly statements to the Ministry of Livestock and Dairy Development after loan disbursement is also not being complied with properly. Therefore, in order to necessarily increase the loan flow in this sector, the following instructions are being advised again for compliance:

1. All undisbursed approved loans must be distributed by June 30, 2017;
2. Branch-wise target allocations must necessarily be updated in the future;
3. All participating banks and financial institutions must intensify loan disbursement activities to actual farmers with the assistance of relevant officials of the Department of Livestock Services and must necessarily submit monthly statements to the Ministry of Livestock and Dairy Development after loan disbursement;
4. The proper utilization of disbursed loans must be ensured.

All other instructions of the aforementioned circulars concerning this matter will remain unchanged.

These instructions will take immediate effect.

Yours faithfully, (Dinmoy Royza) Deputy General Manager Phone: 9530322 Agricultural Credit Division