Farm loan disbursement decreased by 3.88-per cent in the first quarter of the current financial year 2014-15 compared with that in the same period of the FY14 while 18 scheduled banks disbursed agriculture loan below 10 per cent of their target. According to the Bangladesh Bank data released on Thursday, farm loan disbursement by all scheduled banks decreased to Tk 2,750.41 crore in July-September of the FY15 from that of Tk 2,861.58 crore in the corresponding period of the FY14.31
A BB official told New Age on Thursday that the farm loan disbursement by the banks had been affected severely in the country’s 21 flood affected districts between July and September of this year which put adverse impact on the banks’ loan distribution to the farmers.
The BB asked the banks on September 11 to disburse fresh farm loans to farmers even if they failed to repay instalments of the previous agricultural loans in the flood-affected districts, but the initiative failed to make a momentum in the farm loan disbursement of the banks, he said.
The banks should have disbursed at least 25 per cent farm loan of their annual target in the first three months of the FY15 to achieve their fiscal programmes but they distributed only 17.69 per cent agriculture loan in the period, he said.
The central bank set a farm loan disbursement target of Tk 15,550 crore for the FY15.
The 18 banks which disbursed below 10 per cent of their farm loan targets in July-September of the FY15 are Sonali Bank, Rupali Bank, Bank Al-Falah, Commercial Bank of Ceylon, Habib Bank, National Bank of Pakistan, State Bank of India, Eastern Bank, The Farmers Bank, IFIC Bank, Jamuna Bank, Midland Bank, NRB Bank, Shahjalal Islami Bank, Southeast Bank, The City Bank, The Premier Bank and Trust Bank.
Of the 18 banks, Seven — Bank Al-Falah, Commercial Bank of Ceylon, Habib Bank, National Bank of Pakistan, State Bank of India, The Farmers Bank and NRB Bank — did not disburse any farm loan in the first three months of the FY15.
The BB official said that the central bank would take punitive measures against the banks which would fail to achieve their targets at the end of the FY15.
In July-September of the FY15, the state-owned commercial banks — Sonali, Janata, Agrani and Rupali — and the two specialised banks — Bangladesh Krishi and Rajshahi Krishi Unnayan — together disbursed Tk 1,404.49 crore in farm loans, which is 15.37 per cent of their annual loan disbursement target of Tk 9,140 crore.
The private and foreign commercial banks together disbursed Tk 1,345.92 crore in agricultural loans in the period, which is 21 per cent of their total annual loan disbursement target of Tk 6,410 crore, the BB data showed.
The BB official said that the country’s banking had maintained a good performance in the FY13 and FY14 due to lower loan disbursement to the industrial sector amid political unrest and uncertainty.
But, the lower farm loan disbursement in the first quarter is a negative sign both for the banking sector and agriculture sector as such type of trend will hit the bank’s profitability and agriculture production, he said.
The business people is yet to make decision to expand their business due to political uncertainty resulting that the banks are still giving a concentration to disburse more farm loans to continue their profitability, he said.
But, the flood-affected farmers were reluctant to receive the loans in the first quarter which will put adverse impact on the overall economic situation, he said.
-With New Age input
