Farm loan disbursement decreased by 5.81 per cent in the first four months of the current financial year 2014-15 compared with that in the same period of the FY14 while 13 scheduled banks disbursed agriculture loan below 10 per cent of their target. According to the Bangladesh Bank data released on Tuesday, farm loan disbursement by all scheduled banks decreased to Tk 3,882.70 crore in July-October of the FY15 from that of Tk 4,122.45 crore in the corresponding period of FY14.
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 October this year which put an adverse impact on the banks’ loan distribution among the farmers.
The BB asked the banks on September 11 to disburse fresh farm loans to farmers in the flood-affected districts even if they failed to repay instalments of the previous agricultural loans, but the initiative failed to improve loan disbursements, he said.
The banks should have disbursed at least 33.33 per cent farm loan of their annual target in the first four months of the FY15 to achieve their fiscal programmes but they distributed 24.97 per cent agriculture loan in the period.
The central bank set a farm loan disbursement target of Tk 15,550 crore for the FY15.
The BB official said that the banks were now more interested in disbursing their credit to the industrial sector avoiding the agriculture sector as the businesspeople were now starting to take loans from the banking sector due to an improvement of political situation.
The businessmen earlier adopted a ‘wait and see’ approach to expand their business due to political unrest and uncertainty, he said.
For this reason, the country’s banking sector maintained a good performance in the FY13 and FY14 in disbursing farm loan due to lower loan disbursement to the industrial sector amid political unrest.
The 13 banks which disbursed below 10 per cent of their farm loan targets in July-October of FY15 are Rupali Bank, Bank Al-Falah, Commercial Bank of Ceylon, Habib Bank, National Bank of Pakistan, State Bank of India, The Farmers Bank, Jamuna Bank, Midland Bank, NRB Bank, Southeast Bank, The City Bank and The Premier Bank.
Of the 13 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 four months of FY15.
The BB official said that the central bank had already warned the banks due to their lower and zero performance in disbursing the farm loan saying that it would take punitive measures against them if they (banks) failed to achieve their targets at the end of the FY15.
In July-October of the FY15, 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 2,150.13 crore in farm loans, which
is 23.52 per cent of their annual loan disbursement target of Tk 9,140 crore.
The private and foreign commercial banks together disbursed Tk 1,732.57 crore in agricultural loans in the period, which is 27.03 per cent of their total annual loan disbursement target of Tk 6,410 crore, the BB data showed.
-With New Age input
