20% of loans in the Agriculture Sector Are Bad Debts

Debts in Banking Sector’s Agriculture and Rural Loan in the current financial year’s July-October rise up to 31 Thousands 349 Crores 57 Lacs. From those loans, 6 Thousand 312 Crores 79 Lacs already became bad debts. From these figures, 20.14% of the total loans in this sector are bad debts, which was 18.64% in last year’s this period. Agricultural Credit Department of Bangladesh Bank’s updated information is showing this report.

The report shows that in 2013-14 financial year’s first quarter (July-October), banks issued 4 thousands 122 Crore 45 Lacs Taka's credit in Agriculture and Non-Agriculture Rural Credits, which was 3 Thousand 327 Crore 78 Lacs Taka in previous year’s first quarter. In that situation, issued credits rise 23.87% and within this period 4 Thousand 618 Crores 89 Lacs Taka was collected opposed to previous years 3 Thousands 956 Crores and 18 Lacs Taka in the first quarter. In this financial year, banks are planned to give 14 thousands 595 Crores taka’s Agricultural Loan. Within the first quarter of the current financial year, banks already gave 28.25% of their planned allocation of the loan, which was 23.55% in last year’s first quarter.

One officer of the central bank told that every year September and October are the time when the distribution of Agriculture Loans increases, as it is the time for plantation of Boro and Aman Rice. And strengthen of central banks monitoring over Agriculture loans made a positive effect. He also told that the banks which failed to distribute the planned Agriculture loan in 2011-12 financial year wear fined. That is why, banks are also coming forward to give agriculture loans and last year banks distribute more loans then, which were allocated. Last financial year’s first quarter, the government-owned commercial and specialized banks were distributed 2 thousands 564 crores 79 lacs taka’s Agricultural Loan, which was 29.18% of their planned annual allocation. Agrani Bank gave 121 Crores 48 lac Taka’s, which was 18.41%; Bangladesh Agriculture Bank 1 thousands 715 crores 60 lacs takas, which is 37.30%, Janata Bank 194 crores 40 lacs taka’s, which is 25.92%, Rajshahi Agriculture Development Bank344 Crores 6 Lacs Taka, which is 23.73%, Rupali Bank 23 Crores 83 lacs Taka, which is 15.89%, Sonali Bank 165 Crores 42 Lacs taka, which is 14.02% of their annual allocation. In the previous financial year, these government-owned banks distributed in a total of 1 thousand 982 crores 89 lacs taka’s agriculture loans, which was 23.04% more than their annual allocation.

In the first quarter of the current financial year, private and foreign banks distributed 1 thousands 557 crores 66 lacs taka’s agriculture loans, which is 26.83% of their annual allocation. In last year’s first quarter, the figure was 1 thousand 344 crores 89 lac taka’s, which was 24.35% of their last year’s annual allocation.

The government-owned banks didn’t do well in these year's while collecting the repayment of the loans. The six government-owned banks collected 2 thousands 627 crores 72 lacs taka’s, which is 10.32% of the loan. In last year’s first quarter, the figure was 2 thousands 508 crores 54 lacs taka, which was 10.82% of the total. In this period, private and foreign banks collected 1 thousand 991 crores17 lac takas, which is 33.82% of the total. And last year’s first quarter the figure was 1 thousands 447 crores 64 lacs taka’s, which was 32.46% of the total loan.

Sources said the, the price increase of fertilizer and other agricultural equipment are forcing labor to take bank loans. That is why; banks are issuing more loans in Aman plantation season. That is why; agriculture loan in this period of time is increasing. Although, farmers are getting less money than their production costs, which is resulting farmers fail in repayment of loan.