Farm loan disbursement posted a 16.03-per cent growth in the first half (July-December) of the current financial year from that in the same period of the FY13 due to a decreased credit demand from the industrial sector. Bangladesh Bank data released on Tuesday, however, showed that 19 banks had disbursed farm loan below 30 per cent of their annual target in the first half of the FY14. Of the 19, three foreign banks disbursed no loan in the agriculture sector in the period.
Bangladesh Bank officials told New Age on Tuesday that the disbursement of overall farm loan had increased in the period as some banks disbursed significant amount of loans in the agriculture sector due to a decreased credit demand from the industrial sector amid political unrest.
The BB data showed that farm loan disbursement by the scheduled banks had increased to Tk 7,450.25 crore in July-December of the FY14 from that of Tk 6,420.44 crore in the corresponding period of the FY13.
A BB official said that the country’s businesspeople had recently adopted a ‘wait and see’ approach to expansion of their investment due to the political violence that pushed up the banks’ farm loan disbursement in the last few months.
The BB has recently asked managing directors and chief executive officers of all banks at a 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, they said.
The central bank gave the directive as the credit growth in the private sector continuously declined since the beginning of the FY13.
The banks collectively disbursed 51.05 per cent of their annual farm loan target in the first six months of the FY14, whereas 45.44 per cent of the target was disbursed during the same period of the FY13.
In the first six months of the FY14, the state-owned commercial banks — Sonali, Janata, Agrani and Rupali — and the two specialised banks — Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank — together disbursed Tk 4,942.28 crore in farm loans, which is 56.23 per cent of their annual loan disbursement target of Tk 8,790 crore.
The private and foreign commercial banks together disbursed Tk 2,507.97 crore in agricultural loans in July-December, which is 43.20 per cent of their total annual loan disbursement target of Tk 5,805 crore.
The 19 banks, which disbursed below 30 per cent farm loan of their annual target, did not take adequate measures to stimulate their farm loan disbursement programmes, the official said.
The banks are – Rupali Bank, Citibank NA, HSBC, National Bank of Pakistan, State Bank of India, Woori Bank, Bangladesh Commerce Bank, Bank Asia, BASIC Bank, BRAC Bank, First Security Islami Bank, IFIC Bank, Mercantile Bank, Prime Bank, Shahjalal Islami Bank, Southeast Bank, Standard Bank, Trust Bank and Uttara Bank.
The three FCBs of 19 banks — National Bank of Pakistan, State Bank of India and Woori Bank — did not disburse any farm loan in the first half of the FY14.
The BB official said that majority of the banks were now enjoying surplus liquidity due to a lower credit demand from the businesspeople due to the recent political uncertainty.
The BB data showed that the credit growth in the private sector had declined to 11.13 per cent in November in the FY14 compared with that of 17.41 per cent in the corresponding month of the FY13.
The official said due to private sector credit growth drop the banks were investing significant amount of fund in the government securities with a lower interest rate of 7-12.16 per cent, he said.
The banks were encouraged to disburse farm loan with an interest rate of 13 per cent in a bid to mobilise their idle fund, he said.
-With New Age input
