SAM

Published:
2019-10-09 11:47:05 BdST

BB sounds tough as July-Aug farm credit drops


FT ONLINE

Farm credit disbursement dropped by nearly 6.0 percent in the first two months of the current fiscal year (FY) in the wake of the flood as well as seasonal effect.

Disbursement of agriculture loans came down to Tk 19.70 billion (1,970 crore) in the July-August period of FY '20 from Tk 20.90 billion in the same period of the previous fiscal, according to the Bangladesh Bank's (BB) latest statistics.

"We've already given a strong message to the banks which could not achieve the agriculture loan disbursement targets in the FY '19," a senior BB official said on Tuesday on phone.

He also said the central bank would go tough on any banks failing to achieve their agriculture loan disbursement targets by the end of FY '20.

"We're working continuously and advising all the scheduled banks to boost farm credit disbursement to bring dynamism in the rural economy of Bangladesh," the central banker explained.

The central bank expects that the agricultural loan disbursement target will be achieved by the end of this fiscal year as the BB is continuously prodding the banks.

He also said the last flood coupled with seasonal effect pushed down the agriculture loan disbursements in different parts of the country during the period under review.

Bangladesh witnessed flooding lasting more than one month (July 01 to August 01) that marooned 6.07 million people in 28 districts out of 64 and claimed 119 lives.

The latest spate of floods is going on at least in 10 districts across the country.

Of the Tk 19.70 billion, eight state-owned banks (SoBs) disbursed Tk 8.42 billion, and the remaining Tk 11.28 billion was disbursed by the PCBs and foreign commercial banks (FCBs).

The SoBs 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).

All scheduled banks achieved 8.17 percent of their FY '20 farm loan disbursement target, fixed at Tk 241.24 billion.

The aggregate recovery of farm loans, however, came down to Tk 26.84 billion in the first two months of FY '20 from Tk 27.65 billion in the same period of the previous fiscal, the BB data showed. "The disbursement of farm credit has already started picking up that would continue until December of this calendar year," Md. Ali Hossain Prodhania, Managing Director of Bangladesh Krishi Bank (BKB), said while explaining the latest trend of farm credit disbursement.

The senior banker also expressed his hope that the BKB would exceed its agriculture loan disbursement target by the end of FY '20.

The specialised public bank has set a target of disbursing Tk 55 billion in farm loans in this fiscal year.

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