Farmers default on 20pc of loans in Jul-Nov

December 27, 2014

Defaulted loans in the country’s agriculture sector stood at Tk 5,854.38 crore as of November 30, 2014 which accounted for 19.55 per cent of the total loans disbursed (Tk 29,945.44 crore) in the sector. The farm sector defaulted loans accounted for 18.22 per cent of the total loans (Tk 34,632.82 crore) disbursed in the sector as of June 30, according to the latest Bangladesh Bank data. Defaulted loans in the agriculture sector were Tk 6,308.95 crore as of June 30.
The defaulted farm loans are still high in the banking sector as a good number of farmers have recently failed to repay their loans as floods affected their crops, a BB official told New Age on Wednesday.
The country’s 21 districts faced flood in between July and September of this year which put an adverse impact on the banks’ credit position in the farm sector, he said.
Against the backdrop, the BB asked the banks on September 11 to disburse fresh farm loans to farmers even if they failed to repay instalments of the previous agricultural loans in the flood-affected districts.
Besides, a large number of farmers failed to repay their loans in the last financial year 2013-14 as they counted huge losses for failure in supplying their products to upazila and district headquarters and to the metropolitan cities due to frequent blockades and general strikes called by the opposition political parties in the period, the official said.
The central bank has recently moved to strengthen the drive for recovery of unpaid farm credits, the official said.
‘We have already given instructions to all banks to expedite both recovery and disbursement of the farm credits,’ he said.
The central bank has already held a number of meetings with top officials of the banks in this connection.
The official said the central bank had already strengthened its monitoring and supervision at field level to stop diverting loans particularly from farming to other purposes.
The BB expects that the amount of defaulted loans in the agriculture sector will decrease in the coming months due to the central bank initiatives, he said.
Bangladesh Krishi Bank held the largest amount of defaulted farm loans or 46.35 per cent amounting to Tk 2,713.85 crore in the banking sector as of November 30.
The BKB, however, disbursed the highest amount of farm loans of Tk 12,180.48 crore among the banks against the total distributed outstanding farm loans of Tk 29,945.44 crore as of November 30.
The BB data showed that as of November 30 the defaulted loans at Sonali Bank stood at Tk 1,127.63 crore, that of Rajshahi Krishi Unnayan Bank at Tk 1,349.14 crore, that of Agrani Bank at Tk 272.96 crore, that of Janata Bank at Tk 242.47 crore, and that of Rupali Bank at Tk 24.36 crore.
The agriculture sector defaulted loans in the private and foreign commercial banks increased by 53.35 per cent to Tk 123.97 crore as of November 30, 2014 from Tk 80.84 crore as of November 30, 2013.
Another BB official said that the state-run banks held larger amount of the agriculture defaulted loans than those of the PCBs and the FCBs as the state-run banks usually disbursed the majority of the agriculture loans in the banking sector.

-With New Age input

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