Bangladesh Bank on Monday said scheduled banks would have to deposit in the central bank three per cent fund of their undisbursed farm loans against their target amount for a certain financial year in a bid to speed up the BB’s agriculture loan disbursement programme.
The BB issued a circular to managing directors and chief executive officers of all banks saying that the central bank would repay the three per cent fund to the respective banks if they distribute the undisbursed amount with their fresh targets for the next financial year.
The central bank will not give any interest on the three per cent as the BB will bring the fund under its custody as financial penalty against the failing banks.
The BB will also repay the partial fund of the three per cent if the banks disburse the partial amount of the undisbursed amount.
The circular said that the banks would be able to preserve the undisbursed amount of their quarterly farm loan target with their BB’s current accounts for one year if they desired.
The banks will not preserve the amount with the current account on mandatory basis, it said.
A BB official said that some banks had frequently failed to fulfil their annual targets of the farm loan disbursement.
The central bank earlier took punitive measures against the banks but their character did not change much, he said.
Against the backdrop, the central bank issued the circular so that they will take initiative to fulfil their annual disbursement targets.
He said that some banks were also not taking proper moves to disburse their targeted farm loans this financial year resulting that the agriculture loans decreased in the recent months.
According to the BB data, farm loan disbursement decreased by 3.86 per cent in the first five months of the current financial year 2014-15 compared with that in the same period of the FY14.
The BB data showed that farm loan disbursement by all scheduled banks decreased to Tk 5,288.27 crore in July-November of the FY15 from that of Tk 5,500.95 crore in the corresponding period of the FY14.
Banks should have disbursed farm loans at least 41.66 per cent of their annual target in the first five months of the FY15 to achieve their fiscal programmes but they distributed 34.01 per cent of the agriculture loan in the period.
The central bank set a farm loan disbursement target of Tk 15,550 crore for the FY15.
The BB data showed that 14 scheduled banks had disbursed agriculture loan below 15 per cent of their fiscal targets in the first five months of the FY15.
The 14 banks are Rupali Bank, Bank Al-Falah, Commercial Bank of Ceylon, Habib Bank, National Bank of Pakistan, State Bank of India, The Farmers Bank, IFIC Bank, Midland Bank, NRB Bank, Shahjalal Islami Bank, Southeast Bank, The City Bank and The Premier Bank.
Of the 14 banks, seven — Bank Al-Falah, Commercial Bank of Ceylon, Habib Bank, National Bank of Pakistan, State Bank of India, The Farmers Bank and NRB Bank — did not disburse any farm loan in the first five months of the FY15.
-The New Age
