State banks neglect farm financing as credit flow falls by 3.0pc in FY15

Farm-credit disbursement fell more than 3.0 per cent in the first 11 months of the just-concluded fiscal year, officials said, blaming the slide mainly on weak lending performances of the state-owned banks (SoBs).
During the period under review, seven SoBs achieved more than 85 per cent of their annual agricultural lending target for the FY 2014-15. The target was Tk 92.40 billion, according to the central bank's latest statistics.
The SoBs are Sonali Bank, Janata Bank, Agrani Bank, Rupali Bank, BASIC Bank, Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnayan Bank (RAKUB).
On the other hand, the foreign commercial banks (FCBs) and private commercial banks (PCBs) achieved nearly 92 per cent of their annual farm-credit-disbursement target for the same fiscal.
Their aggregate target was fixed at Tk 63.10 billion.
"We've already instructed all the banks, particularly SoBs, for taking necessary effective measures to achieve their agricultural loan-disbursement target by the end of the FY 15," a senior official of the Bangladesh Bank (BB) told the FE Sunday.
The overall disbursement of farm credits came down to Tk 136.96 billion in the July-May period of the FY 15 from Tk 141.21 billion in same period of the FY 14.
The BB official also said the bankers, particularly SoBs, had faced difficulties in disbursing and recovery of farm credits as there had been countrywide blockades and shutdowns in the third quarter (Q3) of the fiscal.
The performances of FCBs and PCBs were better than that of SoBs as the former use MFIs (micro-finance institutions) linkage for disbursement of farm credits across the country, the central banker explained.
Echoing the BB official's views, a senior official of a leading SoB said both disbursement and recovery of the agriculture loans had been hampered seriously in the Q3 because their officials could not move freely at field level.
"We've already expedited the disbursement of agriculture loans in line with the BB instructions to achieve our disbursement target for the FY 15," the SoB official noted.
All banks have achieved more than 88 per cent of their aggregate annual agricultural loan-disbursement target for FY 15, fixed at Tk 155.50 billion.
On the other hand, the recovery of farm loans fell by more than 7.0 per cent to Tk 137.83 billion during the period under review from Tk 148.51 billion in the same period of the previous fiscal.
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