BB advises to use persuasion in recovering defaulted farm loans
Bangladesh Bank on Monday asked six state-run banks to give farmers relief from certificate cases by rescheduling their defaulted farm loans. The BB asked the banks not to file any fresh certificate case against farmers as the central bank gave importance on recovering the defaulted farm loans through persuasion. The directives came from a meeting between the senior officials of the central bank and the managing directors of the six state-run banks at the BB headquarters in the capital.
BB deputy governor SK Sur Chowdhury presided over the meeting.
The six banks are Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank.
Sur told reporters after the meeting that it was illogical that farmers would have to face certificate cases due to their write-off loans.
‘More than two lakh farmers have already faced certificate cases and courts issued arrest warrants against 10,000 of them. We should not continue the trend as the farmers are on the run to avoid arrest warrant,’ he said.
The BB asked the banks to withdraw the certificate cases filed against the farmers on mutual understanding, he said.
The central bank gave directives to the banks to take initiatives to free the farmers from any type of harassment in receiving farm loans in the days to come, he said.
He said, ‘The BB has asked the banks to hold awareness programmes for the farmers so that they will not be loan defaulters. Besides, we have asked the banks to give awards to the farmers who will show the best performances in repaying loans.’
According to the latest central bank data, the number of unsettled certificate cases stood at 2,05,372 as of November 30, 2014 from 2,02,274 as of January 31, 2014.
The defaulted loans involving the certificate cases stood at Tk 570.41 crore as of November 30, 2014 from Tk 552.70 crore as of January 31, 2014.
Courts issued arrest warrants against 10,224 farmers between 1991 and 2014 as they failed to repay bank loans in time, the BB data showed.
A BB official said the six state-run banks filed certificate cases with the executive magistrate’s courts to recover defaulted loan up to Tk 50,000 from farmers.
The trend in settling the certificate cases usually maintain a slower pace than that of filing the new cases, he said.
The BB data showed that the six state-run banks filed 2,504 certificate cases against farmers in November last year while the courts settled only 1,710 cases in the month.
In January 2014, the banks filed 3,785 certificate cases while the courts settled 2,499 cases in the month.
Against the backdrop, the BB asked the banks to speed up their farm loan recovery programme by avoiding certificate cases.
-With New Age input