Activities at the Chittagong Port were disrupted on Wednesday during the first day of Jamaat-e-Islami\'s third spell of shutdown. — Focus Bangla
The central bank has moved to strengthen the drive for recovery of unpaid farm credits as the non-performing loans (NPL) in the agricultural sector increased over 20 per cent of late.
According to the Bangladesh Bank statistics, the share of NPL in the total outstanding loans in this sector rose to 20.04 per cent in the July-September period of the current fiscal year (FY).
The NPL was 18.22 per cent as of June 30 this calendar year.
Bankers and officials have attributed such upturn of non-performing loans to the recent flooding and improper sanction of farm credits.
Mostly the state-owned commercial banks (SoCBs) and development finance institutions (DFIs) are counting such unpaid credits.
During the period under review, the total amount of NPLs with four SoCBs and two DFIs stood at Tk 58.86 billion.
Their share accounts for 98 per cent of the total NPL of Tk 60.07 billion in the agriculture sector.
In the Q1 of the FY 15, the total outstanding loan in this sector from the country's banking system was Tk 299.71 billion.
"We've already directed all banks to expedite both recovery and disbursement of the farm credits," a senior official of the Bangladesh Bank (BB) told the FE.
The central bank has already held a couple of meetings with top officials of SoCBs, DFIs, private commercial banks (PCBs) and foreign commercial banks (FCBs) in this connection.
He also said the central bank has already strengthened its monitoring and supervision at field level to stop diverting loans particularly from farming to other purposes.
"We expect that the volume of NPL in the agriculture sector would decrease by December this year," the central banker noted.
Disbursement of agriculture loan came down to Tk 27.50 billion in the Q1 of the FY 15 from Tk 28.61 billion in the corresponding period of the previous fiscal, the BB data showed.
All scheduled banks have achieved nearly 17.69 per cent of their annual agricultural loan-disbursement target for FY 15.
The aggregate farm-loan target is Tk 155.50 billion.
The central bank has already taken different initiatives to achieve the target by the end of this fiscal year through boosting disbursement.
According to the BB data, the overdue loans in the agriculture sector also rose to Tk 76.99 billion in the Q1 of the FY 15 from Tk 75.67 billion in the same period of the previous fiscal.
Acknowledging the recent increase in the NPL, an official of a leading SoCB said sometimes improper sanctioning of loans coupled with involvement of middlemen in the process contributes to the enhancement of NLP.
"Political turmoil and frequent strikes also contributed to the piling up of classified loans in the farm sector," the banker said.
Talking to the FE, Monzur Ahmed, managing director of Rajshahi Krishi Unnayan Bank (RAKUB), said: "We've taken effective measures so that fresh farm loans do not turn into NPL."
He also said the RAKUB has strengthened its recovery drives to help lessen its NPL in the coming months.
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