BB intensifies monitoring on agri loan disbursement

The central bank has intensified its monitoring and supervision on sanctioning and disbursement of agri credit to ensure its proper utilisation, official sources said.
The latest move aims to ensure that at least 60 per cent of farm credit goes to crop production, they added.
"We have asked the banks to monitor flow of agri loan disbursement so that farming is not hampered due to fund shortage," a senior Bangladesh Bank (BB) official told the FE.
Elaborating the monitoring activities of central bank, he said banks have been asked to make sure loans are going to real farmers so that non-performing loans are not increased. The quantum of classified loans increased 11.58 per cent to Tk 572.91 billion in the third quarter (Q3) of 2014 (July-September) from Tk 513.44 billion in the previous quarter.
He said the Agricultural Credit and Financial Inclusion Department of BB regularly collects monthly statements on farm credit disbursement and recovery from the scheduled banks as part of its supervision.
The department of bank inspection also carries out supervision of farm loan disbursed by the scheduled banks. Besides, the Agricultural Credit and Financial Inclusion Department regularly monitors proper utilisation of farm loan, he added.
Another official said the central bank every month sits with high-ups of state-owned commercial and specialised banks and in every two months with high-ups of private and foreign banks to monitor overall loan disbursement, recovery, impediments to attaining target, and quality of sanctioned loan.
The taskforce in branch offices of central bank sits with representatives of scheduled banks in every three months to monitor updates on loan disbursement and recovery.
However, statistics show that despite the intensified monitoring by the central bank agri loan disbursement fell below target significantly in first four months of the current fiscal year (FY).
The state-owned banks (SoBs) until October last could disburse 23.52 per cent loan against their annual target while the private and foreign banks disbursed 27 per cent of their targeted loan amount.
Sonali Bank disbursed 14.88 per cent, Janata Bank 26 per cent, Agrani Bank 20 per cent, Rupali Bank 5.30 per cent, Bangladesh Krishi Bank 26.85 per cent, and Rajshahi Krishi Unnayan Bank 21.86 per cent against their annual loan sanction target.
Another senior BB official said the banks should have disbursed over 30 per cent of farm credit in first four months to achieve their annual target.
This fiscal the banks had set target of disbursing Tk 155.50 billion farm credit of which SoBs will disburse Tk 91.40 billion and private and foreign banks Tk 64.10 billion.
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