Ten scheduled banks including six foreign banks failed to disburse any farm loan in the first two months of the current financial year 2014-15. The banks are Bank Al-Falah, Citibank NA, Commercial Bank of Ceylon, Habib Bank, National Bank of Pakistan, State Bank of India, The Farmers Bank, Modhumoti Bank, NRB Bank and NRB Commercial Bank. The BB will issue warning
letters against the banks if they do not take required measures in disbursing farm loan in the quickest possible time.
According to the BB data released last week, farm loan disbursement by all banks posted an 11.29-per cent growth in July-August of the FY15 from that in the same period of the FY14 due to a decreased credit demand from the industrial sector in the period.
Farm loan disbursement by the banks increased to Tk 1,724.47 crore in July-August of the FY15 from that of Tk 1,549.50 crore in the corresponding period of the FY14.
A BB official told New Age that the country’s businesspeople had adopted a ‘wait and see’ approach to expansion of their investment due to the political uncertainty that pushed up the banks’ farm loan disbursement in the recent months.
Due to the political uncertainty, credit growth in the private sector plunged into a stagnant situation since the FY13, he said.
Against the backdrop, the BB had frequently asked the managing directors and chief executive officers of all banks to disburse more loans in the agriculture sector to spur the credit growth in the private sector.
But, the 10 banks did not disburse any farm loan in the period as they have not taken initiative in this regard, the official said.
He said that the foreign banks usually showed reluctance to speed up their
farm loan disbursement programme as they have no rural branches.
For this reason, the BB asked the FCBs to disburse farm loan through NGO linkage, but they are yet to take any initiative to start their farm loan disbursement programme for the FY15.
Besides, four new banks out of nine, which got licences to operate banking business in 2012, also failed to disburse any farm loans.
He said one of the conditions for granting licences to the new banks was that each bank would provide agriculture sector with at least 5 per cent of their total loan portfolios.
In the first two months of the FY15, the state-owned commercial banks — Sonali, Janata, Agrani and Rupali — and the two specialised banks — Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank — together disbursed Tk 781.60 crore in farm loans, which is 8.55 per cent of their annual loan disbursement target of Tk 9,140 crore.
The private and foreign commercial banks together disbursed Tk 942.87 crore in agricultural loans in July-August of the FY15, which is 14.71 per cent of their total annual loan disbursement target of Tk 6,410 crore, the BB data showed.
-With New Age input
