Farm loans disbursement registered a 35.46 per cent growth in the first two months of this fiscal year (2017-18), compared with that in the same period of FY 2016-17.
Banks disbursed Tk 2,794.05 crore in farm loans in the July-August period of FY18 against Tk 2,062.63 crore distributed in the same period of FY17, according to the latest Bangladesh Bank data.
Majority of the banks have been showing an increased interest in disbursing farm loans for long against the backdrop of holding huge surplus liquidity amid dull business situation in the country, a BB official told New Age on Wednesday.
Besides, the central bank has recently asked the commercial banks to take a special drive to speed up the disbursement of farm loans in the flood-affected areas, he said.
BB also asked the banks, which has presence in the flood-affected areas, to reschedule the defaulted farm loans and suspend the loan installments, which were scheduled to be paid by the farmers.
For this reason, the farm loan disbursement increased significantly in the first two months of this fiscal year, the central banker said.
Seven commercial banks, however, disbursed no farm loans against their annual targets to the farmers in the first two months of this fiscal year.
The banks are Bank Al-Falah, Citibank NA, National Bank of Pakistan, State Bank of India, Woori Bank, Modhumoti Bank and Shimanto Bank.
The BB official said that farm loans disbursement by banks continued to increase in recent months as banks were now facing surplus liquidity as the country’s businesspeople had been maintaining a go-slow policy on making fresh investment due to political uncertainty.
He said due to a sluggish trend in the industrial sector credit growth, banks were trying to invest significant amount of funds in the government securities with an interest rate of 3.00-7.00 per cent.
But the government, which is now enjoying a substantial amount of surplus fund with its account, is now accepting limited amount of bids, much to the frustration of the banks.
The government has suspended its auction calendar, a government schedule to
borrow loans from the banking sector, in the last few months, the central banker said.
The government, however, started borrowing from the banking sources from the outset of this month.
In the July-August period, eight state-owned commercial and specialised banks — Sonali, Janata, Agrani, Rupali, BASIC, BDBL, Bangladesh Krishi and Rajshahi Krishi Unnayan Bank — together disbursed Tk 808.66 crore in agriculture loans.
The amount is 8.43 per cent of their total annual farm loan disbursement target of Tk 9,590 crore.
The private and foreign commercial banks together disbursed Tk 1,985.39 crore in agriculture loans in the first two months of FY18. The amount is 18.37 per cent of their total annual farm loan disbursement target of Tk 10,810 crore.
The BB data showed that the year-on-year defaulted loans in the agriculture sector also decreased to Tk 4,550.67 crore as of August 31, 2017 from Tk 5,158.20 crore as of August 31, 2016.
The BB official said that the defaulted farm loans had decreased in the last few months as the banks rescheduled the loans with a view to helping the flood-affected farmers in the Haor belt and northern parts of the country.
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