Farm loan release rises slightly in July-April

Staff Correspondent | Published: 00:00, May 25,2019

 
 

A file photo shows a farmer inspecting a paddy field on the outskirts of Dhaka. Disbursement of farm loans by the scheduled banks increased by 3.18 per cent or Tk 572.08 crore in July-April this fiscal year (2018-19) compared with that in the same period last fiscal year. — New Age photo

Disbursement of farm loans by the scheduled banks increased by 3.18 per cent or Tk 572.08 crore in July-April this fiscal year (2018-19) compared with that in the same period amid banks’ move to achieve the central bank set target ahead of year end.
All the scheduled banks have disbursed Tk 18,525.50 crore in loans to the farmers in the July-April period of FY19 against the disbursement of Tk 17,952.89 crore during the same period of last fiscal year.
In the ten months, the banks have achieved 84.97 per cent of their overall Tk 21,800 crore annual farm loan disbursement target.
The entities will have to disburse Tk 3,274.5 crore more to the farmers in May and June of FY19 to achieve the target.
Although the banks were suffering from liquidity crisis, farm loan release by the banks increased in March mainly due to complying with the regulatory obligation, said officials of banks.
The banks have to achieve the central bank-set targets regarding farm loan disbursement.
If they fail, the banks are supposed to keep aside the undisbursed farm loan amounts and they are not allowed to use the funds for other purposes.
According to Bangladesh Bank data, farm loan disbursement by the banks increased by 5.16 per cent or Tk 111.08 crore to Tk 2,261.51 crore in April from Tk Tk 2,150.43 crore in March.
Officials of the central bank said that though the farm loan disbursement by the banks was slow during the first eight months of FY19, the entities were expediting disbursement in the remaining months to fulfil the target.
In FY18, when the banks had adequate liquidity, they had disbursed Tk 21,393.55 crore in farm loans against the Tk 20,400-crore target.
In July-February of FY19, farm loan disbursement was 2.81 per cent or Tk 406.86 crore lower than the amount in the same period of FY18 due mainly to liquidity crisis in the country’s banking sector.
Considering the slow growth in loan disbursement, the central bank in December, 2018, extended policy support by allowing the banks to reschedule short-term farm loans even without any down payment.
The policy relaxation was aimed at facilitating the famers, who received rescheduling facility under the policy relaxation in 2015, but again became incapable of repaying loan installments on different grounds including natural disaster.
As per the central bank’s latest report, outstanding farm loans stood at Tk 41,360.56 crore as on April 30 this year while the figure was Tk 40,601.11 crore at the end of FY18.

More about:

Want stories like this in your inbox?

Sign up to exclusive daily email

Advertisement

images

 

Advertisement

images