Bangladesh Bank will ask scheduled banks to distribute farm loan application forms among farmers as it has recently received allegations that some banks did not give the forms to the clients to avoid disbursement of the agriculture credit, said officials of the central bank.
The BB will issue a circular to all banks in the quickest possible time asking them to upload the application forms on their respective websites and publish media advertisements in this regard.
A BB official told New Age on Thursday that the central bank had recently conducted inspections on different branches of Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank while they had unearthed a number of anomalies in the approval and disbursement process of the farm loans.
The officials of the two banks do not usually provide farm loan application forms to the farmers if they (farmers) did not manage any political recommendation, he said.
‘Besides, the officials are providing the forms to their familiar clients. Moreover, they give approval for disbursement of the farm loans by taking bribe’, he said.
Every bank has to preserve all rejected farm loan application forms in which they (banks) have to mention the cause of rejection in line with the central bank directives, he said.
But the two banks did not preserve the rejected forms which raised suspicion that they resorted to corruption in the approval process of the farm loans, he said.
Against the backdrop, the central bank may issue show-cause notice against the two banks asking them to explain why they did not preserve the rejected application forms, he said.
Not only the two banks but also a significant number of other banks denied to provide the application forms among farmers just to avoid disbursement of farm loans, another BB official said.
The rate of interest on the farm loans is lower than that of the other loan products of the banks which is one of the major causes of denying to provide the application forms to the farmers, he said.
According to the BB circular, the banks can impose maximum 13 per cent rate of interest on the farm loans while the rate on the SME loan is between 18 per cent and 22 per cent.
The central banker hoped that the new initiative would speed up the banks’ farm loan programme and ensure transparency of the approval and disbursement process of the loans.
According to the latest BB data, 10 banks including six foreign banks failed to disburse any farm loans in the first two months of the current financial year 2014-15.
The BB data, however, showed that 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 FY14.
-With New Age input
