BB steps up monitoring as farm loan disbursement falls by 5.0pc

The central bank has strengthened monitoring and supervision as the first half (H1) of this fiscal year (FY) has witnessed a fall in the disbursement of agriculture loans by nearly 5.0 per cent, officials said.

As per its latest move, the Bangladesh Bank (BB) is set to meet with senior officials of 30 local and foreign private banks today (Tuesday) to know about their 'action plan' for the second half (H2) of FY 2018-19.

The banks, whose farm loan disbursement performances were not up to the mark, have been asked to provide their updated information on overall agriculture credit activities at the special meeting, the officials said.

The agriculture loan disbursement came down to Tk 102.31 billion in the July-December period of FY '19 from Tk 107.56 billion in the same period of the previous fiscal, according to the central bank's latest statistics.

Of the total amount, Tk 50.74 billion was disbursed by eight public banks and the remaining Tk 51.57 billion by the private commercial banks (PCBs) and foreign commercial banks (FCBs).

All the banks have achieved nearly 47 per cent of their annual agricultural loan disbursement target for FY '19. The target has been fixed at Tk 218 billion.

Meanwhile, the central bank has asked the eight state-owned banks to continue their efforts to achieve the target by the end of this fiscal.

The eight state-owned banks are Sonali Bank Limited, Janata Bank Limited, Agrani Bank Limited, Rupali Bank Limited, BASIC Bank Limited, Bangladesh Development Bank Limited (BDBL), Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnayan Bank (RAKUB).

Two public banks, out of eight, have also been instructed to review their agriculture loan disbursement performance zone-wise in order to bring dynamism in their farm credit activities, according to the BB officials.

The instructions were given at a review meeting of senior officials of the eight public banks, held at the central bank headquarters in Dhaka on Monday with General Manager of Agricultural Credit Department of the BB Manoj Kanti Bairagi in the chair.

"The agriculture credit disbursement dropped slightly during the period under review mainly due to the last national polls," a BB senior official told the FE while replying to a query.

He also said the central bank is working continuously to achieve the farm credit disbursement target by the end of FY '19.

Talking to the FE, Bangladesh Krishi Bank (BKB) Managing Director Md Ali Hossain Prodhania said both disbursement and recovery of farm credits may increase in the coming months, which would help achieve the overall target by end of this fiscal.

The recovery of farm loans, however, rose to Tk 103.93 billion during the July-December period of FY '19 from Tk 101.32 billion in the same period of the previous fiscal.

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