2 agri-bank hold Tk 31,200 cr NPL

Incurs 20pc of total NPLs

Mahfuja Mukul : The total non-performing loans of two agriculture financing banks have stood at Tk 31,200 crore till December 2023, which is 20 percent to the total overdue loans of the banking sector of Bangladesh.
According to the latest Bangladesh Bank report, at the end of September this year, 9.44 percent loans of BKB’s disbursed Tk25,000 crore were non-performing, while Rakub had 19.29 percent of the Tk6,200 crore total loans.
Three months ago, total non-performing loans stood at Tk 156,000 crore or 10.11 percent at the end of June 2023. According to bankers, the overall NPL ratio in the banking sector has decreased, primarily due to the decline in defaulted loans of a state-owned bank by about Tk11,000 crore.
In January this year, Bangladesh Krishi Bank’s (BKB) defaulted loans increased by around Tk 558 crore. This has affected the entire agricultural sector. Despite the good performance of other banks, the amount of non-performing loans in the overall agriculture sector has increased. In January, defaulted loans in this sector increased by Tk 558 crore. This information is known from the latest report of Bangladesh Bank.
Analyzing the data of the central bank, it can be seen that the amount of defaulted loans of Krishi Bank was Tk 993 crore till last December. At the end of January this year, this number stood at Tk 2,544 crores. In other words, defaulted loans have increased by Tk 551 crore in the space of a month.
In this regard, the managing director of Krishi Bank Shaukat Ali Khan said media, ‘The current situation of Krishi Bank is very good. By solving the old problems, we were able to make visible changes. Generally, the classified loan calculation is finalized every three months. I will check whether there is any numerical error in the data generated on monthly basis.
He said, ‘Krishi Bank’s classified loan accounting system is still manual, the process of automating it is underway. There will be no mistake when it is done.’
Meanwhile, the central bank has received information about several irregularities, including the concealment of defaulted loans of Tk 3,118 crore through manipulation against Bangladesh Krishi Bank.
It is known that the total amount of defaulted loans of Krishi Bank as of June 2023 in the central bank is Tk 3,315 crores. But inspection shows that it is actually Tk 6,503 crores.
According to the report, at the end of January this year, the disbursed credit status in the agricultural sector stood at Tk 55,635 crore. Out of this, the status of defaulted loans stands at Tk 4,366 crores or 7.79 percent. And at the end of last December, the credit status in the agricultural sector was Tk 55,395 crores. At that time the status of defaulted loans was Tk 3,778 crores. That is, the debt has increased by Tk 240 crore within a month. On the other hand, defaulted loans increased by Tk 558 crore.
It is known that among the defaulted loans of the agricultural sector, the state-owned banks have about Tk 3,804 crores, which is 10.22 percent of the total loans. 532 crore or 2.89 percent in private sector banks.
According to the report, in the first 7 months of the current fiscal year (July-January), the banks have distributed loans of Tk 21,153 crores; Which is 60.44 percent of the target. Disbursed loans in the first seven months of the current financial year are Tk 2,469 crore more than the same period of the previous year. The amount of disbursed loans during the same period of the last financial year was Tk 18,684 crores.
Meanwhile, agricultural credit disbursements decreased in January. In January 2024, loans of Tk 2,827 crore have been disbursed to the sector. In the previous month (December) Tk 3,046 crores of loans were disbursed. That is, within one month, the loan disbursement in this sector has decreased by Tk 218 crore. Earlier, Tk3,319 crore were distributed in the month of November. Accordingly, the loan disbursement in this sector decreased by Tk 273 crore in December. Disbursement of Kamal agricultural loans for two consecutive months.
According to Bangladesh Bank data, during July-December of the current financial year 2023-24, banks have collected Tk20,310 crores of agricultural loans. The amount collected during the same period of the previous financial year was Tk18,446 crores. Debt repayment has increased by Tk 1,864 crore compared to the previous year.
In the current financial year, Bangladesh Bank has fixed the target of annual agricultural and rural credit distribution of Tk 35 thousand crores, which is 13.60 percent more than the last financial year. Last fiscal year, the agricultural loan target was Tk 30,811 crore.
According to the information, in the first 7 months of the current financial year, agricultural loans of Tk 7,551 crore have been disbursed through the state-owned banks. The amount of which is 62.77 percent of the target for the entire financial year. On the other hand, Tk 13,602 crore has been distributed through private banks, which is 59.22 percent of their target for the entire financial year.
There is an order to give agricultural loans at the same rate throughout the year based on the crop season. Still some banks are behind in disbursement of loans. In the first six months of the current financial year, 11 banks disbursed loans 30 percent below the target.
According to Bangladesh Bank guidelines, banks have to disburse at least 2 percent agricultural loans out of total loans. If a bank fails to meet the target, that bank has to pay a penalty.
On the other hand, the dependence of private banks on Micro Finance Institutions (MFIs) is being further reduced to reach the farmers at low interest rates. And for this, Bangladesh Bank has made it mandatory to distribute at least 50 percent agricultural credit through the bank’s own network, which was 30 percent until now. Apart from this, the amount of agricultural loan to be given to which sector has also been determined.
It is said in the agricultural credit policy formulated for the current financial year, doing various agricultural activities on the roof of the building is a new idea. Which is currently increasing in urban areas. Basically, the garden which is developed on the roof of the house with flowers, fruits and vegetables in a scientific manner is known as roof garden.