Co-ops willing to disburse farm, SME loans

Cooperative societies opt for disabusing farm and SME loans by partnering banks in a latest development in lending to these thrust sectors.      
Officials said the Department of Cooperatives (DoC) placed a proposal in this regard for approval at a coordination meeting of major watchdog bodies Wednesday.
The regulators who sat for the meeting are Bangladesh Bank (BB), the Bangladesh Securities and Exchange Commission (BSEC), the Office of the Registrar of Joint Stock Companies and Firms, the Insurance Development and Regulatory Authority (IDRA), the Micro-credit Regulatory Authority (MRA), the DoC, and Bangladesh Telecommunication Regulatory Commission (BTRC).
The stocktaking meeting was held at the central bank headquarters in the capital with BB Governor Fazle Kabir in the chair.
The cooperative societies want to disburse such credits using the process to facilitate the ongoing financial inclusion initiatives through bringing more unbanked people into the banking network, according to the officials.
Such initiative will also help in boosting their (cooperative societies) financial activities, they quoted the DoC as saying in the proposition.
Around 120 cooperative societies are now functioning across the country.   
Currently, country's scheduled banks are allowed to disburse their agricultural loans using 'NGOs-Linkage' process to achieve their farm-loan-disbarment targets by the end of each fiscal year.
The central bank earlier had asked the commercial banks, particularly private and foreign commercial banks, to link up with non-governmental organisations (NGOs) to ensure optimum disbursement of farm credits across the country.
"We'll examine the proposal," SK Sur Chowdhury, deputy governor of the BB, told reporters after the meeting. He also said the meeting also discussed progress on vacation of writ petitions filed with the High Court by Dhaka Mercantile Cooperative Bank Limited (DMCBL).
The DoC had been asked for taking effective measures to vacate writ petitions.
A total of nine cases and writ petitions of the DMCBL are now pending with different courts, an official familiar with the coordination meeting told the FE earlier.
Two regulators had earlier been asked to prohibit the cooperative societies from using the word 'Bank' in their day-to-day operations.
The government had amended the related rules and regulations imposing restrictions on the use of the term bank by any companies and establishments, in order to protect innocent depositors.
Under the rules and regulations, no cooperative society will be allowed to collect deposits or extend loans from and to members of the public or organisations other than its members.
The meeting also advised the BTRC to develop a data warehouse of subscriber identification module (SIM) to facilitate monitoring and supervision on the mobile financial services.
"We've advised the BTRC to develop a data store of SIMs like CIB (Credit Information Bureau) of the central bank," Mr. Sur Chowdhury said in reply to a query.
Under the existing provisions, any outstanding loan worth Tk 50,000 or above is included in the CIB reporting system.
The CIB was set up on August 18, 1992 in the central bank aiming to improve credit risks and reduce the extent of non-performing loans.
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