The New Nation - Internet Edition

Staff Reporter

Bangladesh Bank yesterday suggested the private commercial banks (PCBs) to disburse new agricultural credits on easy terms in the cyclone-affected areas of the country keeping the welfare of farmers in mind, instead of thinking about making profits.

The suggestion came from Bangladesh Bank Governor Dr Salehuddin Ahmed at a review meeting on agriculture credit disbursement with Managing Directors and senior officials of the PCBs in his office yesterday. Dr Salehuddin also expressed dissatisfaction over private commercial banks' poor disbursement of agriculture credits compared to their voluntary commitment to contribute to the sector, said a senior official of the central bank who attended the meeting.

The Governor had earlier offered incentives to the private banks for contributing to the agriculture sector.

In response the PCBs had voluntarily committed to provide agriculture loans of around Tk 1,300 crore during the current fiscal year, against Tk 7,000 crore committed by the state-controlled commercial banks. The review meeting found 15 of the private commercial banks did not disburse any agriculture loan till the end of November.

Statistics furnished at the meeting showed barely five PCBs have disbursed about half (Tk 635 crore) of their target for the year.

Eastern Bank Limited has already exceeded their annual target while Islami Bank achieved 67 per cent. Others disbursed the loans are Pubali Bank, NCC Bank and BASIC Bank. Dr Salehuddin said only several private commercial banks have come forward to disburse agricultural credits in the cyclone affected areas responding to the central bank's request, while the rest of the PCBs are yet to disburse loans among the affected farmers, fishermen and small traders on easy terms.

"I have told them to provide agricultural loans to the affected farmers and traders in the cyclone hit areas on special consideration," he said.

The Governor also asked the PCBs to submit immediately after the Eid vacation their agriculture credit disbursement statements up to December 15, the meeting source said.

Dr Salehuddin advised the bankers to utilise the NGO network in rural areas where PCBs have limitation in disbursing loans to the farmers. Some of them are already taking the advantage.

He asked the private banks to provide loans for storage and marketing of agriculture products as well as advised them to make up their low return out of agriculture credit from other sectors.

Not only the agricultural loans, the Governor also suggested the PCBs to disburse small loans among fishermen and small traders. "We want to bring about special dynamism in agriculture and rural economy," he told the bankers.

Yesterday's meeting was part of a series Bangladesh Bank has been holding since the two floods that hit the agriculture sector badly to encourage commercial banks to contribute to the agriculture sector.

The central bank's initiative intensified immediately after the devastating cyclone Sidr. Economists estimated losses in rice production due to floods and Sidr ranging between 21.39 lakh tons

and 23.63 lakh tons.

As part of the effort, Bangladesh Bank is also planning a meeting with foreign commercial banks operating to encourage them to contribute to agriculture sector, said a senior Bangladesh Bank official.