The volume of classified loans in the agriculture sector has marked a significant rise in nine months up to March because of lower recovery mainly due to political unrest early this year, officials said.
The non-performing loans (NPLs) of farmers rose to Tk 70.74 billion during the July-March period of the current fiscal year (FY) 2014-15 from Tk 66.63 billion during the same period last year.
"We're trying to reduce the volume of classified loans in the agriculture sector by expediting the recovery drive across the country," a senior official of the Bangladesh Bank (BB) told the FE.
The share of NPLs in the total outstanding loans of the agriculture sector rose to 23.12 per cent in the July-March period of FY'15 from 20.52 per cent in the corresponding period of FY'14.
Total outstanding loans in the agriculture sector stood at Tk 305.99 billion during the period under review, according to the central bank's latest statistics.
The BB official also said recently-introduced rescheduled policy on short-term agriculture loans would contribute to reducing the volume of NPLs in the sector.
Earlier on February 23 last, the central bank issued a fresh rescheduled policy on short-term agriculture loans aiming to boost production by providing the farmers across the country with facility.
Under the policy, the banks are allowed to reschedule such agriculture loans under 'banker-client' relationship through relaxation of down payment. In some cases, such loans can be rescheduled even without any down payment.
Such rescheduled facility will continue until December, 2015.
"We expect that the volume of NPLs will decrease in the coming months for strengthening the recovery drive along with the existing rescheduled facility," Manjur Ahmed, Managing Director of the Rajshahi Krishi Unnayan Bank (RAKUB), told the FE.
Talking to the FE, another BB official said the central bank is also taking different necessary measures to achieve the agriculture credit disbursement target by the end of this fiscal year.
As part of the moves, the central bank is organising review meetings at divisional and regional levels across the country aiming to expedite both recovery and disbursement of farm loans.
"We've already completed five divisional level review meetings. The rest of three meetings will be held next month," the central banker said.
The BB's latest move came against a backdrop of downward trend in both disbarment and recovery of farm loans in recent months.
Disbursement of farm credit decreased by more than 2.0 per cent to Tk 111.66 billion in the July-March period of FY 15 from Tk 114.46 billion in the same period of FY 14, the BB data showed.
Of Tk 111.66 billion, state-owned banks disbursed Tk 66.27 billion, and the remaining Tk 45.39 billion was disbursed by private commercial banks (PCBs) and foreign commercial banks (FCBs).
All banks have achieved nearly 72 per cent of their annual agricultural loan disbursement target for FY 15, fixed at Tk 155.50 billion.
But the recovery of farm loans came down to Tk 117.56 billion during the period under review from Tk 124.23 billion in the same period of the previous fiscal year.
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