But 12 banks release below 70pc of targets
Farm loan disbursement posted an 8.66-per cent growth in 11 months of the current financial year 2013-14 compared with that in the same period of the FY13 although 12 scheduled banks disbursed below 70 per cent of their loan targets to farmers in the period.
According to the Bangladesh Bank data to be released today, farm loan disbursement by all scheduled banks increased to Tk 14,120.89 crore in July-May of the FY14 from that of Tk 12,995.22 crore in the corresponding period of the FY13.
Due to the increasing trend in farm loan disbursement this financial year, the BB is likely to set the disbursement target at around Tk 15,547 crore for the upcoming financial year, which is 6.54 per cent higher than that of the current fiscal year.
The 12 banks which disbursed below 70 per cent of their farm loan targets in the period are National Bank of Pakistan, State Bank of India, Woori Bank, Citibank NA, Bank Asia, Modhumoti Bank, Prime Bank, Southeast Bank, National Bank, Premier Bank, United Commercial Bank and Trust Bank.
Of the 12 banks, four —National Bank of Pakistan, State Bank of India, Woori Bank, and Modhumoti Bank — did not disburse any farm loan in the 11 months of the FY14.
A BB official told New Age on Sunday that the central bank had already warned the banks which performed poorly in disbursing farm loans that it would take punitive action if they (the banks) fail to achieve their targets at the end of the FY14.
He said that that the banks’ farm loan disbursement had increased in 11 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 political uncertainty.
Due to the political uncertainty, credit growth in the private sector decreased significantly in recent months of the FY14, he said.
The BB data showed that the credit growth in the private sector dropped to 11.86 per cent in April of the FY14 from 12.60 per cent in the same month of the FY13.
Against the backdrop, the BB has 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 12 banks failed to disburse substantial amount of farm loans in the period as they had not taken initiatives in this connection, the BB official said.
He said that the 12 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.
In July-May 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 8,714.83 crore in farm loans, which is 99.14 per cent of their annual loan disbursement target of Tk 8,790 crore.
The private and foreign commercial banks together disbursed Tk 5,406.06 crore in agricultural loans in the period, which is 93.13 per cent of their total annual loan disbursement target of Tk 5,805 crore, the BB data showed.
The BB official hoped that the country’s banking sector would be able to achieve the farm loan disbursement target of Tk 14,595 crore for the FY14 if they (banks) maintain the current loan distribution performance.
-With New Age input
