BB sets Tk 77b loans target for flood-hit farmers

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FE Report
The Bangladesh Bank (BB) has asked the commercial banks for taking preparations to disburse agricultural loan as soon as the floodwater recedes.
The instruction came at a meeting of the committee on agro-credit supervising and monitoring held at the central bank Monday with its Deputy Governor and Chairman of the committee Nazrul Huda in the chair.
"We have asked the banks to disburse agro-credit immediately after floodwater recedes," Nazrul Huda told reporters after the meeting.
He also said the central bank asked the banks to establish a special cell, headed by the chief executive, to monitor and supervise the overall agro-credit disbursement.
"We will take tough actions against any irregularity in disbursement of loan to the farmers," Huda said, adding that the central bank will ensure protection of farmers from any harassment in receiving such loan.
The BB deputy governor said only the flood-affected farmers will be eligible for the credit despite having outstanding farm credit.
The outstanding loans will be made classified and their operation will remain suspended for the time being, he added.
Meanwhile, the central bank has set a target of Tk 76.98 billion, which includes an amount of Tk 10.79 billion from private commercial banks -- both local and foreign - for disbursement among flood-affected farmers across the country.
"Yes, it's an ambitious target but achievable with the coordinated efforts of all concerned," Huda said, adding that it will be possible to recover the losses in agriculture, caused by the flood, if the credit disbursement target is achieved.
For the first time, 39 private commercial banks, both foreign and local, have already allocated their funds for the agricultural credit along with the eight state-owned banks and financial institutions.
The loans have been given to agro-based eight sub-sectors like crops, irrigation equipment, livestock, agricultural products marketing, fisheries and poverty alleviation.
Currently, the high-powered committee on 'agro-credit supervising and monitoring' is working to supervise, monitor and disbursement of the agro-credit.
The worsening flood has already affected at least 24 districts across the country.
On the other hand, most of the private commercial banks have instructed their branches for taking preparations to start disbursement of the agro-credit as soon as water recedes.
"We have asked all our branches to take preparation for disbursement of the agro-credit immediately after the floodwater recedes," Managing Director of the Social Investment Bank Limited KM Ashaduzzaman told the FE.
According to the BB's statistics, the state-owned eight banks and financial institutions disbursed agricultural credit worth Tk 52.93 billion in fiscal 2006-07, which is over 83 per cent of the target of Tk 63.51 billion.
In 2005-06, the banks and financial institutions disbursed agricultural credit worth Tk 54.96 billion and in 2004-05, the amount was Tk 49.57 billion.