BB asks banks to recover overdue agri credit soon

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FE Report
The central bank has asked eight state-owned commercial banks and financial institutions to intensify drive for recovering the overdue agricultural credit, officials said.
The instruction came at a review meeting with the officials of the banks and financial institutions, held in the central bank Wednesday with General Manager of the Agricultural Credit and Special Programme Department of the Bangladesh Bank (BB) M Abdul Haque in the chair.
The central bank took the move against the backdrop of a declining trend in recovery of agricultural credit during the first four months of the current fiscal compared with the corresponding period of the previous fiscal.
A total of Tk 16.97 billion was recovered in July-October period in fiscal 2008-09 against Tk 17.63 billion of the same period of the previous fiscal, according to the central bank statistics.
The position of overdue agricultural credit as percentage of total outstanding improved, decreasing from 41.21 per cent at the end of October, 2007 to 36.73 per cent the end of October this year.
The position of outstanding agricultural loan stood at Tk 177.79 billion during the period under review against Tk 156.35 billion of the corresponding period of the previous fiscal.
The central bank also directed the banks and financial institutions for taking necessary measures to achieve agro-credit disbursement target by the end of this fiscal.
The banks and financial institutions have achieved 26.74 per cent of their annual target, which has been fixed at nearly Tk 94 billion. The amount is 13 per cent higher than the last fiscal, the BB's data showed.
"We've asked the banks and financial institutions to gear up the recovery drive of overdue agro-credit that would also help to disburse fresh loan in the sector," a BB senior official told the FE after the meeting.
The state-owned banks and financial institutions along with the private commercial banks (PCBs) disbursed Tk 25.076 billion as agriculture credit during the period under review against Tk 18.207 billion of the corresponding period of the previous fiscal. He also said the disbursement of farm credit will improve further in the months of November and December.
The banks and financial institutions are: Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, Bangladesh Krishi Bank (BKB), Rajshahi Krishi Unnayan Bank (RAKUB), Bangladesh Rural Development Board (BRDB) and Bangladesh Samabaya Bank Limited (BSBL).
The loans have been given to agro-based eight sub-sectors like cultivation, irrigation equipment, livestock, agricultural products marketing, fisheries and poverty alleviation.
The meeting reviewed the latest position of farm credit disbursement and supervision across the country, they added.
The BB has already relaxed its credit policy aiming to facilitate disbursement of agriculture loans to sharecroppers and landless farmers across the country.
Under the new policies, sharecroppers, who are directly engaged in farming, will be entitled to receive agriculture loan.
Besides, the central bank made it mandatory for all local and foreign commercial banks on September 29 last to disburse agriculture credit from this fiscal to help ensure food security of Bangladesh.
It has also introduced a 'Revolving crop credit limit system' for a three-year term to gear up disbursement of the farm loan.