Dhaka, Bangladesh (BBN) – The classified loans in the agriculture sector decreased slightly in seven months to January this fiscal year (FY) as strengthening recover drives by banks, officials said.
The amount of non-performing loans (NPLs) of farmers dropped by 0.22 per cent to BDT 52.72 billion during the July-January period of the FY 2017-18 from BDT 52.84 billion in the same period last year, according to the central bank’s latest statistics.
Talking to the BBN a senior official of the Bangladesh Bank (BB) said the volume of default loans in the agriculture sector fell slightly during the period under review mainly due to expedite recovery drives by the scheduled banks.
The share of NPLs in the total outstanding loans of the agriculture sector fell to 13.06 cent in the first seven months of this fiscal from 14.52 per cent in the same period of the FY 17.
Total outstanding loans in the sector stood at BDT 403.68 billion during the period under review against BDT 363.89 billion in the same period of the previous fiscal.
On the other hand, the recovery of farm loan rose to BDT 118.76 billion during the period under review from BDT 108.15 billion in the same period of the previous fiscal.
The BB official also expects that the declining trend of NPLs in the agriculture loans will continue in the coming months as the BB had strengthened its monitoring and supervision.
Echoing the BB’s official, Managing Director of Bangladesh Krishi Bank (BKB) Ali Hossain Prodhania said the BKB has already intensified its monitoring and supervision to increase recovery of loans particularly which would be classified.
“We’ve asked our officials concerned recently to take necessary measures so that fresh loans do not turn into NPLs,” Mr. Prodhania explained.
The central bank of Bangladesh has already advised the banks to expedite both recovery and disbursement of the agriculture loans, another BB official said.
Meanwhile, disbursement of farm credit increased by more than 4.0 per cent to BDT 127.02 billion in the July-January period of the FY 18 from BDT 121.59 billion in same period of the FY 17, the BB data showed.
Of BDT 127.02 billion, eight state-owned banks disbursed BDT 52.99 billion, and the remaining BDT 74.03 billion was disbursed by the private commercial banks and foreign commercial banks.
All banks have achieved more than 62 per cent of their annual agricultural loan disbursement target for FY 18, fixed at BDT 204 billion.