Soured loans in the agriculture sector marked a significant rise in seven months to January as political unrest affected recovery, officials and bankers said.
Classified loans of farmers rose to Tk 72.19 billion during the July-January period of the current 2014-15 financial year from Tk 70.30 billion in the same period last year.
They said farmers are facing problems while selling their produces as the supply chain has almost broken since January 5 following the countrywide blockade and shutdowns, enforced by the BNP-led 20-pary alliance.
The share of non-performing loans in outstanding loans of the agriculture sector rose from 21.92 per cent in July-January of the current fiscal to 23.72 per cent of the similar period a year ago.
Total outstanding loan in the sector stood at Tk 304.35 billion in the country's banking system under the period against Tk 320.75 billion in the corresponding period of the previous fiscal.
"We've already asked bankers to take effective measures to cut classified loans through strengthening their recovery drives," a senior official of the Bangladesh Bank (BB) told the FE Wednesday.
The banks have also been asked to take necessary steps that the fresh loans do not turn into classified due to the lack of proper monitoring and supervision, the BB official added.
The central banker expressed the hope that amount of classified loans would decrease within March this year.
"We're now trying to expedite our recovery drive through strengthening monitoring and supervision," Manjur Ahmed, Managing Director of the Rajshahi Krishi Unnayan Bank (RAKUB), told the FE over phone.
He also said seven state-backed banks have been asked to take effective measures to settle farm loans dispute "amicably" instead of filling certificate cases against farmers.
The banks are Sonali Bank Limited, Janata Bank Limited, Agrani Bank Limited, Rupali Bank Limited, BASIC Bank Limited, Bangladesh Krishi Bank and RAKUB.
"We have been informed that a guideline for rescheduling agriculture loans will be issued shortly to facilitate farmers," Mr. Ahmed said.
The total amount of NPLs with state-controlled banks reached Tk 71.32 billion, which accounted for more than 98 per cent of the total classified loans in the agriculture sector.
However, disbursement of agriculture loan fell nearly 4.0 per cent to Tk 84.88 billion in the first seven months of the FY 15 from Tk 88.20 billion in same period of the FY 14.
Of Tk 84.88 billion, the state banks disbursed Tk 48.47 billion, and the remaining Tk 36.42 billion was disbursed by the private commercial banks (PCBs) and foreign commercial banks (FCBs), the BB data showed.
Banks have achieved nearly 55 per cent of their annual agricultural loan disbursement target for the current fiscal, fixed at Tk 155.50 billion.
On the other hand, the recovery of farm loan fell by 7.79 per cent to Tk 90.62 billion during the period under review from Tk 98.28 billion in the same period of the previous fiscal.
"We've already asked the banks for taking necessary measures to achieve the farm credit disbarment target by the end of June this fiscal," another BB official said.
He also said the BB has given such directives to the banks from deferent meetings, held at the central bank headquarters in Dhaka recently.
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