The New Nation - Internet Edition

Staff Reporter

To revitalise the rural economy, the private banks are going to expand operations in the rural areas to provide loans on agriculture and small and medium enterprise (SME).

"Private banks applying for opening agriculture or SME branches will be given approval on easy terms," Bangladesh Bank Governor Atiur Rahman said at an agreement signing ceremony between Prime Bank, Eastern Bank and Mutual Trust Bank on Thursday.

As per the agreement, the three banks can take loans at five per cent interest and invest them at 10 per cent interest from the Tk 200 crore refinancing scheme initiated in August for installing solar energy, bio-gas and effluent treatment plants.

The central bank Governor said the branches will have to be outside district centres and in upazila or village areas. Bangladesh Bank will release a circular in this regard very soon.

He emphasised the need of banks to consider the issue of ecology.

He underscored the need that the banking sector will have to be developed into a model of green investment through investing in installations of solar energy, bio-gas and effluent treatment plants.

He also urged banks not to give loans for projects that harm the environment such as filling rivers, building illegal structures and polluting industries.

Banks are allowed to give loans of up to Tk 70,000 for installing solar panels in rural areas and Tk 1,75,000 in urban areas.

The loan limit for establishing solar voltaic connection plants will depend on the wattage.

According to the central bank's green energy policy, solar panels in urban areas may range from 170-520W and for rural areas, 10-130W. The interest rates on loans in these three sectors will be no more than 10 percent under any circumstances.