The Padma Bank Limited will provide loans at 4 percent interest rate to farmers to increase production in the agricultural sector in the country.

This loan will be given under a fund titled "5000 crore refinancing scheme for agriculture sector to ensure food security of the country" formed by Bangladesh Bank (BB), said a press release on Wednesday.

It said an agreement was signed between the Bangladesh Bank and the Padma Bank to disburse the loans on easy terms.

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In November last year, the central bank formed a refinance scheme of Tk5,000 crore for farmers as part of the government’s efforts to stave off food scarcity amid a looming global crisis in 2023 stemmed from the Russia-Ukraine war.

Abul Kalam Azad, director to Agriculture Credit Division of the central bank and Faisal Ahsan Chowdhury, managing director (Current Charge) of Padma Bank, signed the agreement on behalf of their respective organisations in the presence of BB Governor Abdur Rauf Talukdar at Jahangir Alam Conference Hall of the BB’s head office.

AKM Sajedur Rahman Khan, deputy governor of the central bank, its Executive Director (Agricultural Credit Department) Md Anwarul Islam and senior officials from both organisations were present during the signing ceremony.

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Farmers will be able to take loans for production of paddy, fisheries, vegetables, fruits, flowers, poultry and dairy items under the livestock sector.