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Govt asks BB to give low-interest loan to tea estate owners

Suggests creation of Tk 203.45cr refinance scheme

AKM Zamir Uddin

A file photo shows a tea garden in Moulvibazar. The government has asked Bangladesh Bank to give bank loans at five per cent interest rate to the owners of tea estates by creating a refinance scheme. — New Age photoA file photo shows a tea garden in Moulvibazar. The government has asked Bangladesh Bank to give bank loans at five per cent interest rate to the owners of tea estates by creating a refinance scheme. — New Age photo

The government has asked Bangladesh Bank to give bank loans at five per cent interest rate to the owners of tea estates by creating a refinance scheme.
BB officials said the government’s move contradicted the central bank’s agriculture and rural credit policy which allows loans at low interest rate only for farmers.
The commerce ministry on January 1 sent a letter to BB governor Atiur Rahman requesting him to create a refinance scheme of Tk 203.45 crore for the tea estate owners, a BB official told New Age on Sunday.
The official said the BB governor had already directed officials concerned to take measures in this regard quickly.
The existing agriculture credit policy of the BB does not allow the tea estate owners to take farm loan at 13 per cent interest rate from the scheduled banks as the facility are allowed only for farmers, he said.
‘Owners of corporates are now holding the majority of the tea estates in the country. Under the agriculture credit policy, it is not logical to serve the interest of the corporates by creating a refinance fund with five per cent interest rate,’ he said.
Earlier in November last year, the commerce ministry had requested the BB to take measures to provide bank loans to the tea estate owners at four per cent interest rate considering tea as an import replacement product like turmeric, ginger and sunflower.
Farmers are now enjoying six per cent interest rate subsidy against loans for cultivating turmeric, ginger and sunflower.
The government provides the subsidy to the banks which disburse loans at four per cent interest rate to the farmers of the products.
The BB had rejected the commerce ministry’s proposal of lowering interest rate as the finance ministry only can take this type of decision, he said.
BB governor Atiur Rahman told New Age on Thursday that the central bank had recently asked the commerce ministry to take recommendation from the finance ministry for its (commerce ministry) proposal.
He said, ‘Refinance fund is a part of the government’s fiscal policy. So it is a requirement to take permission from the finance ministry for creating such fund.’
According to the January 1 commerce ministry letter, finance minister Abul Maal Abdul Muhith recently sent a letter to the commerce ministry to take steps in the interest of tea estate owners.
The finance minister asked the commerce ministry to take initiatives so that the central bank would create a refinance scheme with low interest rate for the tea estate owners, the letter said.
The letter said that the tea estate owners were now not interested to extend their tea estates by taking bank loans due to high interest rate.
The country imports four to five million kilogram of tea to meet the local demand annually although it previously exported around 80 per cent of the locally cultivated tea aboard, the ministry letter said.
Against the backdrop, Bangladesh Tea Board has taken a 12-year strategic development policy from fiscal year 2012-13 to the FY 2023-24 for developing tea cultivation.
Under the strategic policy, tea cultivation will be extended to 6,440 hectare lands in the 106 tea estates of the country.
The tea estates will require Tk 205 crore to implement the tea board’s strategic policy.
Of the required fund, tea estate owners will spend only Tk 1.55 crore, the ministry letter said.
The commerce ministry said that the tea estate owners would be able to take loans to collect the remaining amount of Tk 203.45 crore from the Bangladesh Krishi Bank at five per cent interest rate if the central bank creates a refinance scheme for them. 




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