DHAKA, July 1, 2026 (BSS) - Bangladesh Bank (BB) today issued new operational 
guidelines for the Bangladesh Bank Agricultural Development Common Fund 
(BBADCF) to help ensure full achievement of annual agricultural and rural 
credit disbursement targets by scheduled banks.

According to a circular issued by the Agricultural Credit Department (ACD), 
scheduled banks failing to meet their agricultural and rural credit 
distribution targets by June 30 of a financial year will have the unachieved 
portion of their targets deducted and deposited into the BBADCF within three 
months after the end of the financial year.

The circular also said any agricultural and rural loans identified as 
unacceptable following quality verification would similarly be deducted and 
transferred to the fund.

Under the guidelines, Bangladesh Bank will allocate money from the BBADCF to 
eligible banks within 30 working days based on their requirements and annual 
agricultural credit targets. 

The fund will be provided at an interest rate of 4 percent for a maximum 
tenure of 18 months. 

In the absence of sufficient applications, the central bank will allocate the 
fund on a case-by-case basis.

Banks receiving the funds will lend them to customers at a maximum interest 
rate of 10 percent.

The loans must be disbursed only through the banks' own branch networks, 
while lending through microfinance institution (MFI) linkages has been 
prohibited.

The maximum loan ceiling for an individual borrower under the scheme has been 
fixed at Taka 50 lakh.

To strengthen risk management, participating banks must create a Risk 
Mitigation Fund by depositing an amount equivalent to one percent of the 
interest earned. 

They are also required to maintain one percent of the interest as a General 
Reserve under their Common Equity Tier-1 (CET-1) capital.

The circular said banks must submit quarterly progress reports to Bangladesh 
Bank's Agricultural Credit Department-1, which will monitor implementation 
through both on-site and off-site inspections.

It also clarified that all credit risks associated with customer loans will 
remain with the lending banks, and they must repay Bangladesh Bank regardless 
of their loan recovery performance.

The guidelines allow contributing banks to count the amount deposited in the 
BBADCF as part of their Statutory Liquidity Ratio (SLR).

If a bank fails to repay the principal and interest to Bangladesh Bank within 
the stipulated 18-month period, the central bank will recover the outstanding 
amount by debiting the bank's current account.

The circular warned that any misuse of the fund would result in immediate 
recovery of the amount along with interest charged at the prevailing policy 
rate.

Issued under Section 45 of the Bank Company Act, 1991, the new guidelines 
supersede the previous instructions issued on December 19, 2022, and came 
into effect immediately.