Turmoil fuels banks\\\' farm credit concerns

Bankers are worried over disbursement and recovery of agriculture loan this month due to the political turmoil going on across the country with no sign of abating.
Bankers are facing difficulties with their monitoring and supervision on both disbursement and recovery of farm credit as the nonstop blockade enforced by the 20-party alliance has been continuing since January 6 last.
"We're now emphasising digital monitoring using mobile phones instead of physical presence to avoid any unwanted situation," Manjur Ahmed,  Managing Director of the Rajshahi Krishi Unnayan Bank (RAKUB), told the FE over phone.
He also said the RAKUB was working to achieve the annual agriculture loan disbursement target.
Talking to the FE, a senior official of the Bangladesh Bank (BB) said the central bank had already asked the banks to continue with both disbursement and recovery of farm credit in any circumstances.
He also said the BB would give advices in consideration of the overall situation to six state-owned banks at a review meeting, scheduled to be held at the central bank on January 28.
"We're still hopeful about achieving the agriculture loan disbursement target by the end of this fiscal," the central banker noted.
However, both disbursement and recovery of agriculture loan fell more than 5.0 per cent in the first half of the current fiscal year (FY) 2014-15 compared to the corresponding period of the previous fiscal.
Disbursement of agriculture loans dropped by 5.05 per cent to Tk 70.74 billion in the July-December period of the FY '15 from Tk 74.50 billion in the corresponding period of the FY '14, according to the central bank statistics.
Of the Tk 70.74 billion, six state-owned banks disbursed Tk 41.49 billion and the remaining Tk 29.25 billion was disbursed by private commercial banks (PCBs) and foreign commercial banks (FCBs).
All scheduled banks achieved more than 45 per cent of their annual agricultural loan disbursement target, fixed at Tk 155.50 billion for the FY '15.
On the other hand, the recovery of farm loans fell by 5.65 per cent to Tk 78.81 billion during the period under review from Tk 83.53 billion in the same period of the previous fiscal.
The non-performing loans (NPLs) in the agriculture sector came down to 19.09 per cent in the first half (H1) of the FY '15 from 19.43 per cent in the corresponding period of the FY '14.
The aggregate amount of NPLs in the agriculture sector stood at Tk 57.65 billion during the period under review with the aggregate amount of outstanding loans accounting for Tk 153.06 billion, the BB data showed.
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