DHAKA, June 8, 2026 (BSS) - Bangladesh Bank (BB) has introduced a revolving refinance scheme worth Taka 10,000 crore to enhance food security through increased agricultural production and employment generation in rural areas across the country.

The central bank today issued a circular detailing the operational guidelines of the fund titled "Refinance Scheme for the Agriculture and Rural Sectors to Ensure Food Security by Increasing Agricultural Production and Creating Employment."

The scheme, financed from Bangladesh Bank's own resources, will remain in force for five years.

Under the arrangement, participating banks will receive refinance support from the central bank at an interest rate of 4 percent, while the maximum lending rate for end borrowers has been fixed at 8 percent on a simple interest basis.

According to the circular, the fund will operate as a revolving scheme, allowing repaid loans to be recycled and redistributed throughout its tenure to maximize outreach and impact.

The policy places special emphasis on extending credit facilities to small, marginal and sharecropper farmers.

Individual farmers will be eligible for loans of up to Taka 5 lakh for crop cultivation against crop hypothecation without requiring land as collateral.

The maximum loan ceiling has been set at Taka 30 lakh for crop and grain-related activities, Taka 1 crore for livestock and poultry farming, Taka 20 lakh for purchasing agricultural machinery and Taka 15 lakh for other rural income-generating activities.

The repayment period for borrowers has been fixed at a maximum of 18 months, including a grace period of up to three months.

To strengthen financial inclusion, the guidelines encourage banks to facilitate credit access for women entrepreneurs and small farmers through alternative forms of security, including personal, social and group guarantees instead of conventional land-based collateral.

Banks have also been advised to utilize their agent banking outlets, sub-branches and group lending mechanisms to ensure wider coverage at the grassroots level.

The Agricultural Credit Department-2 of Bangladesh Bank will oversee implementation of the scheme.

Scheduled banks interested in participating will be required to sign participation agreements with the central bank and maintain separate accounts for the refinance funds.

The circular further stipulates that participating banks must submit monthly progress reports to Bangladesh Bank to ensure transparency and effective monitoring.

Bangladesh Bank warned that banks charging interest rates above the prescribed ceiling or misusing the refinance facility would face an additional 2 percent interest penalty on the concerned amount.

The central bank expects the initiative to help mitigate the adverse impacts of climate change and global economic uncertainties by strengthening domestic food production, enhancing rural livelihoods and supporting sustainable agricultural growth in the country.