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Farm credit disbursement picks up

Siddique Islam | October 27, 2019 00:00:00

Farm credit disbursement grew by nearly 2.0 per cent in the first quarter (Q1) of fiscal year (FY) 2019-20, as demand for such loan started generating after floods.

Disbursement rose to Tk 35.55 billion from July to September of FY '20 from Tk 34.94 billion in the same period last fiscal, according to the latest central bank statistics.

"Farm credit disbursement picked up in September that would increase significantly in the coming months," a senior Bangladesh Bank (BB) official on Friday.

The disbursement was insignificant in the first two months of the current fiscal mainly due to floods and seasonal effects, the central banker told the FE.

Bangladesh witnessed flooding for more than one month from July, marooning 6.07 million people in 28 out of 64 districts and claiming 119 lives.

Different areas on the Padma-Gangetic basin still remain inundated.

Of the total amount, eight state-owned banks (SoBs) disbursed Tk 16.41 billion and the rest Tk 19.13 billion was disbursed by private commercial banks (PCBs) and foreign commercial banks.

"We're working continuously to cross the farm-credit disbursement target by the end of this fiscal," the BB official said in reply to a query.

As part of the move, the regulator is set to meet with all scheduled banks this week to review the latest situation on disbursement and recovery performances.

The BB high-ups are scheduled to sit with senior PCB officials at the central bank headquarters in Dhaka on October 28.

On October 30, the central bankers are set to meet with senior SoB officials, according to officials.

The SoBs are Sonali Bank Limited, Janata Bank Limited, Agrani Bank Limited, Rupali Bank Limited, BASIC Bank Limited, Bangladesh Development Bank Limited (BDBL), BKB and Rajshahi Krishi Unnayan Bank (RAKUB).

At the meetings, BB will ask bankers to take effective measures to boost farm credit disbursement in order to achieve their targets by the end of this fiscal.

"We'll ask the bankers at the meetings to disburse agriculture loans in an effective and transparent way," another BB official said.

Meanwhile, all the scheduled banks have achieved 14.73 per cent of their FY '20 disbursement target for Tk 241.24 billion.

But BB data showed aggregate loan recovery fell to Tk 43.74 billion in the first three months of FY '20 from Tk 45.08 billion in the same period last year.

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