Agricultural loan: 14 banks fail to disburse half of target in 10 months

Fourteen banks are lagging behind in disbursing agricultural loans under the government's incentive package for farmers.

Even after 10 months of the current financial year, these banks have not been able to disburse half of the disbursement target.

Such information has come up in the updated report of the central bank regarding the distribution of agricultural and non-agricultural loans.

However, two of these banks claim that there are discrepancies in the data of the central bank.

Among the 14 banks, the foreign-owned Woori Bank has not disbursed a single taka in the last 10 months, according to the central bank report.

However, the bank's Deputy General Manager Niaz Uddin Khan told The Business Standard that they had disbursed Tk12 crore at the end of April, which was more than the target. He could not understand why the distribution is shown zero.

A similar picture exists in the case of private sector Simanto Bank. According to the central bank, the bank's target is Tk14 crore, but the disbursement in 10 months is only Tk26 lakh.

A senior official of the bank told TBS that their distribution was more than Tk3 crore. "I don't understand why the central bank statement is showing less," he said.

Asked about this, an official of the concerned department of Bangladesh Bank said, "Banks provide us with information on the distribution of agricultural loans online. We add the information we get to the report. There is no chance of discrepancy here."

Meanwhile, according to the central bank, AB, Union, IFIC and Rupali banks have disbursed less than 30% loans. Other banks have disbursed just over 40% of the target.

Asked about the shortfall in disbursements, Sirajul Islam, spokesperson and executive director of the central bank, told TBS that banks were regularly pressured by the central bank to increase lending.

He is hopeful that the situation will change in the next two months (May and April). He said that although the disbursement of some banks is low, the overall target will be met by the end of the financial year.

Under the Agriculture and Rural Credit Policy and Programme for 2020-2021, the banks have been given a target of disbursement of Tk26,292 crore in the current financial year. Of this, Tk20,373 crore was dispersed during July-April, which is 77.50% of the target.

According to the central bank report, out of the Tk5,000 crore incentive package announced last year to help the agriculture sector cope with the impact of pandemic, Tk3,758 crore has been disbursed till 13 April.

Apart from this, Tk891 crore has been disbursed till April against the target of Tk957 crore from the own funds of Bangladesh Rural Development Board.

Meanwhile, in the 10 months of the financial year (July-April), farmers repaid loans amounting to Tk21,436 crore, which is Tk1,000 crore more than disbursed loans.

On the other hand, the amount of defaulted loans in the agriculture sector increased slightly to Tk4,264 crore in July-April, compared to the same period last year.