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Farm sector sees slight fall in classified loans

FE Report | March 17, 2018 00:00:00


Classified loans in the agriculture sector declined slightly in the seven months to January last as banks strengthened recovery drives, officials said.

The amount of non-performing loans (NPLs) made to farmers dropped by 0.22 per cent to Tk 52.72 billion (5272 crore) during the July-January period of the fiscal year (FY) 2017-18 from Tk 52.84 billion in the corresponding period of last fiscal.

"The volume of default loans in the agriculture sector fell slightly during the period under review mainly due to expedited recovery drives by the scheduled banks," a senior official at the Bangladesh Bank (BB) told the FE.

The share of NPLs in the total outstanding loans in the agriculture sector fell to 13.06 cent in the first seven months of this fiscal from 14.52 per cent in the same period of the FY 17.

Total outstanding loans in the sector stood at Tk 403.68 billion during the period under review against Tk 363.89 billion in the corresponding period of the previous fiscal, according to the central bank's latest statistics.

On the other hand, the recovery of farm loans rose to Tk 118.76 billion during the period under review from Tk 108.15 billion in the corresponding period of the previous fiscal.

The central banker expects that the downward trend of NPLs' share in the agriculture loans would continue in the coming months as the BB strengthened its monitoring and supervision.

Bangladesh Krishi Bank (BKB) Managing Director Md. Ali Hossain Prodhania said the state-owned specialised bank has already intensified its monitoring and supervision to speed up recovery of loans particularly classified ones.

"We've asked recently our officials concerned to take necessary measures so that fresh loans do not turn into NPLs," Mr. Prodhania explained.

The central bank of Bangladesh has already advised the banks to expedite both recovery and disbursement of farm loans, another BB official said.

Disbursement of farm credit increased by more than 4.0 per cent to Tk 127.02 billion in the July-January period of the FY 18 from Tk 121.59 billion in the corresponding period of the FY 17, the BB data showed.

Of Tk 127.02 billion, eight state-owned banks disbursed Tk 52.99 billion, and the remaining Tk 74.03 billion was disbursed by private commercial banks and foreign commercial banks.

All banks have achieved more than 62 per cent of their annual agricultural loan disbursement target for FY 18. The target has been fixed at Tk 204 billion.

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