Bangladesh Bank has asked all the scheduled banks to establish a separate agriculture credit department or cell to strengthen monitoring and supervision of farm loan disbursement and recovery.
The banks have also been asked to recruit necessary manpower for monitoring the credit activities, said a circular Bangladesh Bank issued yesterday.
Moreover, the banks have to appoint at least one officer to be tasked with agriculture loan activities only at branch level, and they will be responsible for informing the central bank about the credit activities by July 20 every year, according to the circular.
The designated cell and officer will actively participate in all activities like client selection, loan proposal preparation, evaluation, approval, monitoring, loan disbursement, recovery, participation in the meeting of agri loan committee in district and upazila levels, meeting with farmers and monitoring activities.
The officers will be assigned to oversee that the farmers would not turn into defaulters.
BB took the decision considering the importance and contribution of agriculture to the country’s economy, the circular reads.
“The decision has been taken as some private banks do not pay attention to agri loan activities due to not having adequate manpower that hampers monitoring and supervision,” said Provash Chandra Mallick, general manager of Agricultural Credit and Financial Inclusion, Department of Bangladesh Bank.
The disbursement of agricultural credit decreased by 2% and non-firm rural credit by 32% during July-April period of the current fiscal year as compared to the same period of the previous fiscal year.
The banks extended a total loan of over Tk12,300 crore to the both sectors during July-April this year.
Both agriculture and non-farm rural sector also recorded a fall in loan recovery by 4.36% and 28% respectively during July-April of FY15, compared to the same period of last fiscal.
