Dhaka, Oct. 15 -- Banks will now get a special facility allowing them to maintain lower provisioning requirements for classified loans in agricultural, cottage, micro, and small enterprise sectors, according to the Bangladesh Bank.

Banks are required to maintain a 1.0-percent provision against outstanding loans that are classified as either "standard accounts" or "special mention accounts."

The decision was taken to encourage banks to disburse short-term agri loans and also disburse loans to CMSMEs enterprise sector.

"This is to increase agricultural and SME loans. Banks will have to maintain less security reserves than before against these loans", said one central banker.

Banks have to maintain provisioning from their operating profi...