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Farm-credit disbursements dropped by nearly 27 per cent in the first quarter (Q1) of the current fiscal year (FY 2024-25) due to political unrest across the country and severe flooding in different parts, officials said.
The disbursements came down to Tk 64.58 billion during the July-September quarter of FY '25 from Tk 88.25 billion in the same period of the previous fiscal year, according to the Bangladesh Bank's (BB) latest statistics.
Of the Tk 64.58 billion, eight public banks disbursed Tk 24.32 billion and the remaining Tk 40.26 billion by the private commercial banks (PCBs) and foreign commercial banks (FCBs).
The central bank has already instructed all banks to gear up loan disbursement campaigns across the country to boost production and ensure food security, according to the officials.
The instruction was given at review meetings held at the central bank headquarters in Dhaka on Sunday and Monday, with Kaniz Fatema, director of the Agricultural Credit Department of the central bank, in the chair.
On Sunday, the central bank met with senior officials of eight state-owned banks to review overall agriculture loan disbursement and recovery performances during the period under review.
The eight public sector lenders are Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, BASIC Bank, Bangladesh Development Bank, Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnayan Bank (RAKUB).
The central bank officials also met with senior officials of PCBs and FCBs on Monday in this regard, they added.
"We've also asked the banks for taking effective measures to achieve the agriculture loan disbursement target by the end of June 2025," a senior official of the Bangladesh Bank (BB) told the FE on Monday.
Meanwhile, all the scheduled banks have achieved 17 per cent of their FY '25 agricultural loans disbursement target, fixed at Tk 380 billion.
"Devastating floods at different parts of the country along with political unrest pushed down farm credit disbursement in the Q1 of FY '25," the official explained.
The recovery of farm loans, however, rose to Tk 92.10 billion during the July-September period of FY'25 from Tk 80.14 billion in the same period of FY'24, the BB data showed.
"We're taking preparations to strengthen our loan disbursement efforts from the coming months in line with the central bank's advice," a senior official of BKB told the FE while replying to a query.
He also expected the disbursement of farm loans to pick up from next month (November), and the trend may continue until December next.