Farm-sector NPLs swell by Tk 11.16b in FY ‘17

The volume of classified loans in the agricultural sector bloated by over 27 per cent or Tk 11.16 billion in the just-concluded fiscal year, dodging a close watch by the central bank.

According to Bangladesh Bank (BB)'s latest statistics, the non-performing loans (NPLs) lying with farmers rose to Tk 52.41 billion in the FY 2016-17 from Tk 41.24 billion a year before.

"The volume of NPLs increased mainly due to higher growth in outstanding loans in the agriculture sector," a BB senior official told the FE Sunday.

The total amount of outstanding loans in the sector rose to Tk 390.47 billion in the July-June period of the FY 17 from Tk 344.77 billion in the same period of last fiscal.

"We've already asked the banks for taking effective measures so that fresh loans do not turn into classified ones," said the central banker

However, the share of NPLs in the outstanding loans rose to 13.42 per cent in the FY 17 from 11.96 per cent in the previous fiscal, the BB data showed.

The volume of NPLs from eight state-owned banks stood at Tk 51.01 in the past FY 17 against Tk 40.13 billion in the FY 16, while the classified loans from both private commercial banks (PCBs) and foreign commercial banks (FCBs) rose to Tk 1.40 billion from Tk 1.12 billion. 

Meanwhile, the central bank is set to announce agricultural and rural credit policy and programme for the ongoing FY 18 Thursday (July 27).

"We'll sit with eight state-owned banks on Sunday (July 30) to discuses implementation of the announced agricultural and rural credit policy," the BB official said in reply to a query.

The banks are Sonali Bank Limited, Janata Bank Limited, Agrani Bank Limited, Rupali Bank Limited, BASIC Bank Limited, Bangladesh Krishi Bank (BKB), Rajshahi Krishi Unnayan Bank (RAKUB) and Bangladesh Development Bank Limited.

He also said the central bank will sit with the PCBs and the FCBs in the third week of August.

On the other hand, disbursement of farm credits increased by nearly 19 per cent or Tk 33.52 billion to Tk 209.99 billion in the FY 17 from Tk 176.46 billion a year before.

Of Tk 209.99 billion, eight state-owned banks disbursed Tk 96.98 billion, and the remaining Tk 113 billion was handed out by the PCBs and FCBs.

All banks have achieved 119.65 per cent of their annual agricultural loan-disbursement targets for FY 17, fixed at Tk 175.50 billion.

However, the recovery of farm loans rose by 10.46 per cent or Tk 17.85 billion to Tk 188.41 billion in the FY 17 from Tk 170.56 billion in the previous fiscal.

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