Nine scheduled banks including six new ones failed to disburse any farm loan in the first eight months of the current financial year 2013-14. The banks are Farmers Bank, Meghna Bank, Midland Bank, National Bank of Pakistan, NRB Bank, State Bank of India, South Bangla Agriculture Commerce Bank, Union Bank and Woori Bank. The BB has already warned the banks to impose punitive action if they do not take required measures in disbursing farm loan in the quickest possible time.
According to the BB data released on Wednesday, farm loan disbursement by all banks posted a 15.04-per cent growth in July-February of the FY14 from that in the same period of the FY13 due to a decreased credit demand from the industrial sector in the period.
Farm loan disbursement by the banks increased to Tk 10,107.85 crore in July-February of the FY14 from that of Tk 8,786.05 crore in the corresponding period of the FY13.
A BB official told New Age that the country’s businesspeople had earlier 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 first eight months.
Due to the political unrest, credit growth in the private sector decreased significantly in the first half of the FY14, he said.
Against the backdrop, the BB had asked the 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.
Bur, the nine banks did not disburse any farm loan in the period as they have not taken initiative in this connection, the official said.
He said that the central bank had already issued separate letters to three banks — National Bank of Pakistan, State Bank of India and Woori Bank — to know why they had not disburse any farm loan.
The three foreign banks, however, assured the BB that they would take required measures as early as possible in this regard.
The central bank is going to issue letters within the next few days to six new banks as they also did not disburse any farm loan in the first eight months of the FY14.
He said one of the conditions for granting licences to the new banks was that each bank
would provide agriculture sector with at least 5 per cent of their total loan portfolios but six out of the nine new banks did not meet the condition.
The BB will not give approval to open new branches of the six new banks if they do not fulfil their disbursement target in farm loan in the remaining four months of the FY14.
In the first eight 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 6,494.80 crore in farm loans, which is 73.89 per cent of
their annual loan disbursement target of Tk 8,790 crore.
The private and foreign commercial banks together disbursed Tk 3,613.05 crore in agricultural loans in July-February of the FY14, which is 62.24 per cent of their total annual loan disbursement target of Tk 5,805 crore, the BB data showed.
-With New Age input
