Defaulted loans in the agriculture sector increased by Tk 1,442.62 crore in the first month of the financial year 2014-15 as the farmers failed to repay their loans for not getting fair prices of their products due to a supply chain disruption during political unrest in 2013.
According to the latest Bangladesh Bank data, the defaulted loans in the farm sector increased to Tk 7,751.57 crore as of July 31, 2014 from Tk 6,308.95 crore as of June 30, 2014.
A large number of farmers failed to repay their loans in the second half of the FY14 as they counted huge losses in the first half of the last financial year for failure in supplying their products to upazila and district headquarters and to the metropolitan cities due to frequent blockades and general strikes called by the opposition political parties.
Besides, the BB’s relaxed rescheduling loan policy did not bring any boon for farmers as the defaulted loans in the agriculture sector increased significantly in the recent months, a BB official told New Age on Thursday.
The loan defaulting trend in the agriculture sector increased while overall defaulted loans declined in the first nine months of the FY14 as the banks rescheduled their defaulted loans on wholesale basis by using the central bank’s relaxed loan rescheduling policy, the official said.
He said the banks had provided the influential businesspeople and political persons backed by the government with the central bank facility.
The overall defaulted loans, however, increased further in the banking sector in the last three months of the FY14 as the rescheduled loans became defaulted as the influential businessmen regularised their loan violating the rules and regulations, he said.
But, the farmers failed to reach the top officials of the banks to reschedule their defaulted loans and the banks also showed little interest to save the farmers from the defaulting situation, he said.
The relaxed rescheduled policy would have put positive impact much on the agriculture sector if the farmers got the facility as they (farmers) usually show more responsibility to repay the bank loan than the influential businesspeople, he said.
The defaulted loans in the agriculture sector will increase more in the coming months as a large tract of farmland has recently been affected by flood, the central banker said.
The farm sector defaulted loans accounted for 25.61 per cent of the total loans (Tk 30,270.95 crore) disbursed in the sector as of July 31, 2014.
The classified loans in the agriculture sector were 18.22 per cent of the total loans (Tk 34,632.82 crore) disbursed as of June 30, 2014.
Bangladesh Krishi Bank held the largest amount of defaulted farm loans or 58.60 per cent amounting to Tk 4,542.93 crore in the banking sector as of July 31, 2014.
The BKB, however, disbursed the highest amount of farm loans of Tk 12,306.05 crore among the banks against the total distributed outstanding farm loans of Tk 30,270.95 crore as of July 31, 2014.
The BB data showed that as of July 31, 2014 the defaulted loans at Sonali Bank stood at Tk 1,137.72 crore, that Tk 1,444.59 crore at Rajshahi Krishi Unnayan Bank, that of Tk 277.69 crore at Agrani Bank, that of Tk 232.15 crore at Janata Bank, and that of Tk 22.56 crore at Rupali Bank.
The agriculture sector defaulted loans in the private and foreign commercial banks increased by 15.80 per cent to Tk 93.93 crore as of July 31, 2014 from Tk 81.11 crore as of June 30, 2014.
Another BB official said that the state-run banks held larger amount of the agriculture defaulted loans than those of the PCBs and the FCBs as the state-run banks usually disbursed the majority of the agriculture loans in the banking sector.
The BB data showed that the overdue loans in the agriculture sector also increased significantly in the first month of the FY15.
The overdue loans in the sector rose by 19.84 per cent in July.
The overdue loans in the agriculture sector increased to Tk 9,121.85 crore as of July 31, 2014 from Tk 7,611.69 crore as of June 30, 2014.
The BB officials said that the overdue loans would turn into defaulted loans if the banks failed to recover the loans in the quickest possible time.
-With New Age input
