Saturday, April 20, 2024

Banks go for hefty farm credit release as industrial sector reels

Farm loan disbursement in the first 10 months of the current financial year posted 15.09 per cent growth in comparison with that of 5.65 per cent growth in the same period a financial year ago.
The figure increased as majority of the banks disbursed significant amount of loan in agriculture sector due to a lower credit demand from the industrial sector, said Bangladesh Bank officials.
They said the country’s businesspeople had recently adopted a ‘wait and see’ approach to expand their investment due to the ongoing political violence which pushed up the banks’ farm loan disbursement in the last few months.
According to the BB data released on Sunday, farm loan disbursement by the banks increased to Tk 11,740.16 crore in July-April of the FY 2012-13 from that of Tk 10,200.28 crore in the corresponding period of the FY 2011-12.
The farm loan disbursement by banks was Tk 9,652.84 crore in the first 10 months of the FY 2010-11.
The banks collectively disbursed 83.09 per cent of their annual farm loan target in the first 10 months whereas 73.92 per cent was disbursed during the same period of the FY 2011-12.
In the first 10 months of the FY 2012-13, 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 6,975.88 crore, or 81.05 per cent of their annual loan disbursement target of Tk 8,607 crore.
The private and foreign commercial banks together disbursed Tk 4,764.28 crore in agricultural loans in July-April, which was 86.26 per cent of their total annual loan disbursement target of Tk 5,523 crore.
A BB official told New Age that a majority of the banks was now enjoying a surplus liquidity due to a lower credit demand from the private sector, specially the industrial sector.
The BB data showed that the credit growth in the private sector declined to 12.76 per cent in March compared with that of 19.45 per cent in the corresponding month of the FY 2011-12 due mainly to the recent spates of the political violence, he said.
Under the circumstance, the banks are now investing their significant amount of fund in government securities with a lower interest rate of 8 per cent to 12.16 per cent, he said.
Besides, the banks have also been encouraged to disburse farm loan with an interest rate of 13 per cent in a bid to mobilise their idle fund, he said.
The BB data, however, showed that 15 banks disbursed less than 70 per cent of their annual target of agriculture loans in the first 10 months of the FY 2012-13.
Another BB official said a bank was supposed to disburse 83.33 per cent of its annual target of farm loans
Continued on B2 Col. 1

-With New Age input

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