PCBs, FCBs asked to disburse 2.5pc of total loan to agri sector
Tuesday, 17 May 2011
FE Report
The central bank has asked all private commercial banks (PCBs) and foreign commercial banks (FCBs) to fix agriculture credit disbursement target at least at 2.5 per cent of their total loans from the next fiscal year. "We've taken the latest move aiming to ensure food security through boosting farm credit disbursement across the country," a senior official of the Bangladesh Bank (BB) told the FE Monday. He also said the new directive on agriculture credit disbursement will come into effect from July 1, 2011. As many as 30 PCBs and nine FCBs are now operating their business in Bangladesh. The central bank issued a circular in this connection Monday and asked chief executive officers (CEOs) and managing directors (MDs) of all private and foreign commercial banks to maintain the instructions properly. Under the new provisions, progress of the agriculture disbursement will be reviewed quarterly and if any bank fails to meet the quarterly target, it will have to deposit the remaining fund to the central bank for one year. "But if the total disbursement of farm credit of a bank is above 2.5 per cent of its total lending, there will be no remedial measures even if the target is higher," the BB said in the circular. The BB's latest move came against the backdrop of lower farm credit disbursement by some private and foreign commercial banks, the central bank official said. "At least eight private commercial banks did not achieve 20 per cent of their annual farm credit disbursement targets over the first nine months of this fiscal," another BB official said. All banks and financial institutions disbursed Tk 91.5470 billion during July-March period of the fiscal 2010-11 (FY11) compared to Tk 81.5959 billion of the same period of the last fiscal. Of Tk 91.5470 billion, eight state-owned banks and institutions disbursed Tk 70.0988 billion and the remaining Tk 21.4481 billion was disbursed by the PCBs and the FCBs during the period under review, the BB data showed. "The state-owned commercial banks and financial institutions have already lent a substantial amount of money to the agriculture sector across the country. So the directives will not be applicable to them," the central bank official added. The banks and financial institutions have achieved 72.56 per cent of their annual target, which has been fixed at Tk 162.1740 billion. The amount is 9.6 per cent higher than that of the last fiscal.
The central bank has asked all private commercial banks (PCBs) and foreign commercial banks (FCBs) to fix agriculture credit disbursement target at least at 2.5 per cent of their total loans from the next fiscal year. "We've taken the latest move aiming to ensure food security through boosting farm credit disbursement across the country," a senior official of the Bangladesh Bank (BB) told the FE Monday. He also said the new directive on agriculture credit disbursement will come into effect from July 1, 2011. As many as 30 PCBs and nine FCBs are now operating their business in Bangladesh. The central bank issued a circular in this connection Monday and asked chief executive officers (CEOs) and managing directors (MDs) of all private and foreign commercial banks to maintain the instructions properly. Under the new provisions, progress of the agriculture disbursement will be reviewed quarterly and if any bank fails to meet the quarterly target, it will have to deposit the remaining fund to the central bank for one year. "But if the total disbursement of farm credit of a bank is above 2.5 per cent of its total lending, there will be no remedial measures even if the target is higher," the BB said in the circular. The BB's latest move came against the backdrop of lower farm credit disbursement by some private and foreign commercial banks, the central bank official said. "At least eight private commercial banks did not achieve 20 per cent of their annual farm credit disbursement targets over the first nine months of this fiscal," another BB official said. All banks and financial institutions disbursed Tk 91.5470 billion during July-March period of the fiscal 2010-11 (FY11) compared to Tk 81.5959 billion of the same period of the last fiscal. Of Tk 91.5470 billion, eight state-owned banks and institutions disbursed Tk 70.0988 billion and the remaining Tk 21.4481 billion was disbursed by the PCBs and the FCBs during the period under review, the BB data showed. "The state-owned commercial banks and financial institutions have already lent a substantial amount of money to the agriculture sector across the country. So the directives will not be applicable to them," the central bank official added. The banks and financial institutions have achieved 72.56 per cent of their annual target, which has been fixed at Tk 162.1740 billion. The amount is 9.6 per cent higher than that of the last fiscal.