Farm loan disbursement posted a 12.21-per cent growth in nine months of the current financial year 2013-14 compared with that in the same period of the FY13 even though seven scheduled banks including four new banks did not disburse any loan to the farmers in the period. According to the Bangladesh Bank data released on Thursday, farm loan disbursement by all scheduled banks increased to Tk 11,445.79 crore in July-March of the FY14 from that of Tk 10,200.07 crore in the corresponding period of the FY13.
The seven banks which did not disburse any farm loan in the period are National Bank of Pakistan, State Bank of India, Woori Bank, Farmers Bank, Meghna Bank, Midland Bank and Modhumoti Bank.
The BB has already warned the banks that it would take punitive action if they (the banks) do not take required steps in this regard in the quickest possible time, said officials.
A BB official told New Age that the banks’ farm loan disbursement increased in nine months of the current financial year as banks were enjoying surplus liquidity after the country’s businesspeople had adopted a ‘wait and see’ approach to fresh investment amid the political unrest in the run up to the January 5 national elections.
Due to the political uncertainty, credit growth in the private sector decreased significantly in the nine months of the FY14, he said.
Under the circumstances, majority of the banks are now enjoying surplus liquidity due to a lower credit demand from the businesspeople.
The BB data showed that the credit growth in the private sector declined to 10.73 per cent in February in the FY14 from 13.96 per cent in the corresponding month of the FY13.
The official said due to private sector credit growth fall the banks were investing significant amount of fund in the government securities with a lower interest rate of 7-12.16 per cent.
Against the backdrop, the BB asked the managing directors and chief executive officers of all banks at a recent bankers’ meeting at the central bank’s headquarters to disburse more loans in the agriculture sector to spur the credit growth in the private sector.
Bur, the seven banks did not disburse any farm loan in the period as they had not taken initiatives in this connection, the official said.
He said that the seven banks had earlier assured the BB that they would take required measures as early as possible in this regard, but they were yet to take any initiative in this connection.
He said one of the conditions for granting licences to the new banks was that each bank would have to provide agriculture sector with at least 5 per cent of their total loan portfolios but four out of the nine new banks did not meet the condition.
The BB will not give approval to the four banks for opening new branches if they do not fulfil their disbursement target in farm loan in the remaining three months of the FY14, he added.
In nine months of the FY14, the state-owned commercial banks — Sonali, Janata, Agrani and Rupali — and the two specialised banks — Bangladesh Krishi and Rajshahi Krishi Unnayan — together disbursed Tk 7,221.46 crore in farm loans, which is 82.16 per cent of their annual loan disbursement target of Tk 8,790 crore.
The private and foreign commercial banks together disbursed Tk 4,224.33 crore in agricultural loans in July-March of the FY14, which is 72.77 per cent of their total annual loan disbursement target of Tk 5,805 crore, the BB data showed.
-With New Age input
