AGRICULTURE LOAN DISBURSEMENT

RAKUB takes Tk 5.5cr in illegal processing fees from farmers

AKM Zamir Uddin | Published: 22:44, Mar 15,2017

 
 

A file photo shows farmers harvesting paddy in Rajshahi. Rajshahi Krishi Unnayan Bank slapped Tk 5.50 crore in loan processing fees on farm loans taken by the farmers in the last financial year 2015-2016 breaching the Bangladesh Bank’s rules and regulations that bar such fees. — BSS photo

Rajshahi Krishi Unnayan Bank slapped Tk 5.50 crore in loan processing fees on farm loans taken by the farmers in the last financial year 2015-2016 breaching the Bangladesh Bank’s rules and regulations that bar such fees.
The state-owned specialised bank imposed 0.50 per cent application processing fees on agriculture loans taken by farmers in the FY16 pocketing Tk 5.50 crore, showed a RAKUB document submitted to the central bank.
Despite repeated warning from BB, the Rajshahi-based bank, which was established for agricultural development in the country, is still taking the processing fees, said a RAKUB official.
According to the central bank’s agriculture loan policy, no bank is allowed to take any loan processing fee or any other hidden charges from farmers in disbursing farm loans. The interest rate on the agriculture loan is 10 per cent.
When contacted, BB executive director and spokesperson Subhankar Saha told New Age on Wednesday that the central bank had already asked RAKUB to withdraw the loan processing fees as such charges were unlawful.
‘There is no scope to give facility to RAKUB to take the service charge in line with the central bank’s farm loan policy’, he said.
BB officials, however, said that RAKUB was paying little attention to the central bank directive.
The central bank asked the bank in a meeting on November 14, 2016 to withdraw the processing fee.
It also asked RAKUB to issue a circular within 10 working days mentioning that the farmers would not pay any charges. But, the bank ignored the BB directive.
RAKUB chairman Muhammad Nazrul Islam issued a letter to BB on February 23 requesting it to allow his bank to take the service charges on the loans.
He said that the bank gained a net profit of Tk 4.03 crore in the financial year 2015-16. ‘RAKUB will have to face losses in the FY17 if it withdraws the charge,’ he said.
He said that 70 per cent or Tk 1,100.36 crore of its total disbursed loans in FY16 was farm loans.
He, however, said that the bank’s provisional loss stood at Tk 30.40 crore in the 2016 calendar year as RAKUB had to raise pay for its staff in line with the newly-implemented national pay scale.
The loss will increase further in the coming days if RAKUB does not impose the charges on the farmers, he said.
The cost of fund of the bank is now 10.52 per cent, but it disburses farm loans with an interest rate of 10 per cent to the farmers in accordance with the BB directive, he said.
A BB official, however, told New Age that the cost of fund of the bank was high as the defaulted loans in the bank had increased significantly in the recent years due to a number of loan scams in the bank.
BB data showed that the classified loans in RAKUB increased to Tk 1,005.12 crore as of December 31, 2016 from Tk 898.64 crore as of December 31, 2015.
RAKUB managing director Kazi Sanaul Hoq could not be reached over the phone to take his comments despite repeated attempts.

Want stories like this in your inbox?

Sign up to exclusive daily email

Advertisement

images

 

Advertisement

images