Farm credit disbursement falls 25pc in July-August

BB to sit with public banks to review situation

Siddique Islam | Published: September 26, 2018 10:47:20 | Updated: September 27, 2018 10:55:54

- FE file photo

Farm credit disbursement dropped by over 25 per cent or Tk 7.04 billion in the first two months of the current fiscal year (FY), 2018-19, despite the central bank's close monitoring.

Disbursement of agriculture loan came down to Tk 20.90 billion during the July-August period of FY ’19 from Tk 27.94 billion in the same period of the previous fiscal, according to the Bangladesh Bank's (BB) latest statistics.

Of the Tk 20.90 billion, eight state-owned banks disbursed Tk 7.92 billion, and the remaining Tk 12.98 billion was disbursed by the private commercial banks (PCBs) and foreign commercial banks (FCBs).

"It's a seasonal effect," Md. Ali Hossain Prodhania, managing director of Bangladesh Krishi Bank (BKB), told the FE while explaining the main reason behind the falling trend of agri loan disbursement.

"We expect that the disbursement of farm loan will pick up from this month (September), and the trend may continue until December."

He also expressed the hope that BKB will cross its agriculture loan disbursement target by the end of this fiscal. BKB had set Tk 50 billion farm loan disbursement target for FY ’19.

Meanwhile, all scheduled banks have achieved 9.59 per cent of their FY 19 agricultural loan disbursement target, fixed at Tk 218 billion.

The recovery of farm loans, however, came down to Tk 27.65 billion during the July-August period of FY 19 from Tk 28.66 billion in the same period of FY ’18.

The central bank is set to review the performance of eight public banks in agriculture credit disbursement and recovery at a meeting, scheduled to be held in the BB headquarters in Dhaka on September 30.

"We'll advice the public sector banks at the meeting to take steps for boosting farm credit disbursement in the coming months to achieve their respective disbursement targets by the end of FY ’19," a BB senior official told the FE on Tuesday.

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

He said that in October the central bank will also review the performance of all PCBs and FCBs in agriculture credit disbursement and recovery to perceive the overall farm credit flow situation.

"Fewer-than-usual working days in August have also pushed down the overall agriculture loan disbursement," the central banker noted.

He also said BB is continuously working to achieve the agriculture loan disbursement target by the end of this fiscal year.

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