Finance and Planning Minister M Saifur Rahman yesterday asked the commercial banks to consider slashing interest rates to farmers and agro-based industries.

Agricultural entrepreneurs find both the interest rates and power tariffs unusually high, reducing profit margins of their enterprises.

Taking their concerns into cognisance, the finance minister yesterday summoned the executives of the commercial banks to tell them to lower their lending rate for farm sector at 9 or 10 per cent interest.

He said that many people feel encouraged to invest in agro-based sector, but industry could hardly

make profit after paying high interest on loans.

The finance minister castigated the nationalised commercial banks (NCBs) for charging high interest rate although they secure money from the central bank at only 6 per cent.

"Why do they charge so high rate of interest? In fact, they (NCBs) lack the attitude of entrepreneural banking," Saifur said.

He also advised the commercial banks to set up agricultural wings manned by experts to provide counseling services to the entrepreneurs.

Banks in Bangladesh are free to set their respective lending rates as

the government liberalised the regime. Commercial banks argue that huge bad loans and higher interest rates of government's saving instruments raise their costs of fund, forcing them to charge higher lending rates.

Bangladesh Bank recently took up a move for lowering the interest rate of commercial banks.

Apart from four NCBs and two state-owned specialised banks for agriculture, very few private banks offer farm credit.

In India, the government last month ordered the commercial banks to make farm loans available at 9 per cent interest.