The central bank governor has advised state-owned banks to put extra effort in recovering loans.
Atiur Rahman, however, expressed satisfaction about the disbursement of agricultural loans in this fiscal year.
The Bangladesh Bank boss came up with the advice in a meeting with the field-level officers of government-run commercial and specialised banks at the central bank’s headquarets on Thursday.
“Lending is easy. But recovery is difficult,” he said and added it is not desirable to lend out sums that cannot be recovered.
“So you have to put efforts into loan recovery.”
He said that loan recovery was higher in the first 10 months of this fiscal than the same period of last year.
“Fourteen percent of the disbursed loans went bad.”
The target for agricultural loan disbursement for the banks has been set at Tk 115 billion for this fiscal year– 23 percent more than the last year’s.
In the first 10 months, 78 percent of the target has been achieved.
The governor said he hoped that by the end of the year this figure would reach up to 90 percent.
“In the next fiscal year, the target for agricultural loan disbursement will be increased.”
Rahman said the Bangladesh Bank was trying to make the complicated loan procedures simpler.
“Lending to share croppers without mortgage is also under consideration.”
The field-level officers were called to discuss problems and potentials in loan disbursement, before a target is fixed.
Many farmers do not come to the banks directly, instead, they contact the middlemen, said Gouri Nitai Bhodro, branch manager of Sirajdikhan Sonali Bank under Munshiganj.
“We have to ensure that the farmers come to the banks directly.”
The crops of many farmers, who had taken loans, get damaged by natural calamities, he said.
Insurance system for crops should be initiated, he added.
“More conditions should be imposed instead of writing off interests in bulk. Because many exploit this system of flexible loan conditions,” the official said.
The bank officials were advised to increase loans for cold storage, agro-processing projects and other sectors that benefit farmers.