Abu Sazzad :
Eight commercial banks failed to achieve the agriculture loan disbursement target in the first four months (July to October) of the current fiscal 2015-16.
The banks are National Bank of Pakistan, Habib Bank, Commercial Bank of Ceylon, Bank Al-Falah, Bangladesh Development Bank, Meghna Bank, Prime Bank and Farmers Bank.
Of the eight banks, National Bank of Pakistan, Habib Bank, Commercial Bank of Ceylon, Bank Al-Falah, Bangladesh Development Bank and Farmers Bank have not yet disbursed any farm loan.
The loan disbursement target was Tk 16,400 crore for the current fiscal. Although these banks have failed to fulfill their disbursement target, the farm loan disbursement increased by 19.28per cent in the first four months of the current financial year compared with the corresponding period of the FY15.
Farm loan disbursement by all scheduled banks increased to Tk 4,631.29 crore from Tk 3,882.70 crore disbursed during the corresponding period of the FY15.
In the first four months of the FY16, the eight state-owned commercial and specialised banks namely Sonali, Janata, Agrani, Rupali, BASIC, BDBL, Bangladesh Krishi and Rajshahi Krishi Unnayan together disbursed Tk 2,104.82 crore farm loan. The amount is 22.66 per cent of their annual loan disbursement target of Tk 9,290 crore.
On the other hand, the private and foreign commercial banks together disbursed Tk 2,526.47 crore as agricultural loans in July-October period. The amount is 35.53 per cent of their total annual loan disbursement target of Tk 7,110 crore.
Talking to The New Nation Bangladesh Bank Deputy Governor Nazneen Sultana recently said, the banks are now being compelled to disburse the farm loan in line with their financial year’s target.
The central bank had earlier issued a circular in this regard. According to the circular, the banks would have to deposit the entire fund of their undistributed agriculture loans in a blocked account with Bangladesh Bank.
The central bank took the move as a punishment measure. The central bank implemented the rule from this financial year, she also said.
The BB will return the fund to the respective banks if they disburse the undistributed amount with their fresh targets for the next financial year, she also added.
For this reason, the banks are now more cautious to fulfill their annual farm loan disbursement target to avoid the punishment measure set by the central bank, said Nazneen Sultana.
“Already we have asked the financial institutions to speed up the farm loan disbursement programme across the country”, said the deputy governor.
The banks had recently taken various types of move to recover the defaulted farm loans as the instruction of the central bank, the deputy governor said.
Center Policy Dialogue (CPD) Executive Director Mustafizur Rahman said every year Foreign Commercial Banks (FCBs) fails to fulfill their disbursement target due to their illogical banking policy.
The FCBs deliberately avoid the disbursement target as that they have no rural branches in the country, said the CPD Director.
“Though the FCBs do not have any rural branches, they can make a liaison with the Micro-Finance Institutions (MFIs) in this respect” Mustafizur Rahman.
FCBs should have to sign agreement with the MFIs in order to achieve their agriculture and SME loan disbursement target, which would help reducing the risk management factors, suggested the CPD Executive.
Eight commercial banks failed to achieve the agriculture loan disbursement target in the first four months (July to October) of the current fiscal 2015-16.
The banks are National Bank of Pakistan, Habib Bank, Commercial Bank of Ceylon, Bank Al-Falah, Bangladesh Development Bank, Meghna Bank, Prime Bank and Farmers Bank.
Of the eight banks, National Bank of Pakistan, Habib Bank, Commercial Bank of Ceylon, Bank Al-Falah, Bangladesh Development Bank and Farmers Bank have not yet disbursed any farm loan.
The loan disbursement target was Tk 16,400 crore for the current fiscal. Although these banks have failed to fulfill their disbursement target, the farm loan disbursement increased by 19.28per cent in the first four months of the current financial year compared with the corresponding period of the FY15.
Farm loan disbursement by all scheduled banks increased to Tk 4,631.29 crore from Tk 3,882.70 crore disbursed during the corresponding period of the FY15.
In the first four months of the FY16, the eight state-owned commercial and specialised banks namely Sonali, Janata, Agrani, Rupali, BASIC, BDBL, Bangladesh Krishi and Rajshahi Krishi Unnayan together disbursed Tk 2,104.82 crore farm loan. The amount is 22.66 per cent of their annual loan disbursement target of Tk 9,290 crore.
On the other hand, the private and foreign commercial banks together disbursed Tk 2,526.47 crore as agricultural loans in July-October period. The amount is 35.53 per cent of their total annual loan disbursement target of Tk 7,110 crore.
Talking to The New Nation Bangladesh Bank Deputy Governor Nazneen Sultana recently said, the banks are now being compelled to disburse the farm loan in line with their financial year’s target.
The central bank had earlier issued a circular in this regard. According to the circular, the banks would have to deposit the entire fund of their undistributed agriculture loans in a blocked account with Bangladesh Bank.
The central bank took the move as a punishment measure. The central bank implemented the rule from this financial year, she also said.
The BB will return the fund to the respective banks if they disburse the undistributed amount with their fresh targets for the next financial year, she also added.
For this reason, the banks are now more cautious to fulfill their annual farm loan disbursement target to avoid the punishment measure set by the central bank, said Nazneen Sultana.
“Already we have asked the financial institutions to speed up the farm loan disbursement programme across the country”, said the deputy governor.
The banks had recently taken various types of move to recover the defaulted farm loans as the instruction of the central bank, the deputy governor said.
Center Policy Dialogue (CPD) Executive Director Mustafizur Rahman said every year Foreign Commercial Banks (FCBs) fails to fulfill their disbursement target due to their illogical banking policy.
The FCBs deliberately avoid the disbursement target as that they have no rural branches in the country, said the CPD Director.
“Though the FCBs do not have any rural branches, they can make a liaison with the Micro-Finance Institutions (MFIs) in this respect” Mustafizur Rahman.
FCBs should have to sign agreement with the MFIs in order to achieve their agriculture and SME loan disbursement target, which would help reducing the risk management factors, suggested the CPD Executive.
