Sunday, September 14, 2014

Krishi Bank far away from farmers:Daily Sun

  Bangladesh Krishi Bank (BKB), which was founded with a view to promoting the condition of farmers and agriculture, tends to forget the history of its birth. Depriving the peasants of their due loan, the authorities concerned are disbursing the subsidy money meant for farmers to the persons connected with non-agriculture projects and import financing. As such, the landless and marginal farmers ar
e losing their interest in cultivation. Being busy with foreign and non-agriculture commercial loans, the Krishi Bank is suffering from a rift caused by the burden of difference between shortfalls in provisions as against classified assets. A report of the central bank shows that the ultra-poor farmers got .91 percent of the loan disbursed by Krishi Bank in 2013. That means—91 paisa out of Tk 1 was distributed to the farmers. But BB says the word “ultra-poor farmer” is not defined. In such a situation, the BB termed the sharecroppers, landless farmers having less than .494 acres of land and marginal farmers having land ranging from .494 to 2.47 acres—as ultra-poor farmers. Experts said the farmers of the above three categories are directly involved in the cultivation. Majority of the farmers have less than 2.47 acres of land. The owners of more chunks of land do not cultivate their land of their own. In view of this, the farmers directly involved in cultivation enjoy .91 percent loan of the Krishi Bank. The BB expressed concern over the Krishi Bank’s concentration on the businessmen instead of farmers. It says the said bank is being alienated from prime its prime object. Instead of disbursing loan to the farmers, the Krishi Bank has transferred its fund to the foreign business and non-agricultural sector putting its capital safety in peril. Most of these loans are becoming classified one, causing capital shortfall of the said bank. A report of the BB says the Krishi Bank disbursed Tk 15,123 crore to 34,09,363 persons till December last year. Of the loan, Tk 1.43 crore was distributed to 612 landless farmers, Tk 106.27 crore to 1, 19,378 marginal farmers and Tk 30 crore to 2, 43, 236 sharecroppers. The total loan stood at Tk 137.70 crore disbursed among 3,63,226 ultra-poor farmers. Dr Salehuddin Ahmed, former BB governor, said the government set up the Krishi Bank with a view to disbursing loan to ultra-poor and marginal farmers with low interest. The said bank cannot allocate loan for sectors other than cultivation. The BB gives money to the Krishi Bank so that poor cultivators can get loan at low interest. The Krishi Bank does not return the loan to the BB, let alone its interest. The government returns the money in favour of the said bank as subsidy. The way the Krishi Bank is disbursing the subsidy fund to other people depriving farmers is not acceptable at all. Had the money been allocated to the real persons, the farmers as well as cultivation of land would have promoted. As the farmers take only Tk 10-15 thousand, they do not normally become defaulters. The persons, who get the loan, do not return it. The incident of forgery in the name of opening Letter of Credit (LC) is widespread. In such a situation, strict monitoring of the BB is imperative. The BB should stop giving money to Krishi Bank. He further said “During discharging duty as BB governor, I saw the Krishi Bank giving loan to other sectors in the name of agriculture head. Irregularities were committed in allocating money in various projects and import business. Many irregularities were identified. The loans to the tune of big amount were being classified. The BKB was cautioned. Now, the government and the BB need to take hard-line.” On the other hand, the central bank is disappointed with the little amount of loan allocated to the real farmers. In its report, the BB says it is imperative for the BKB to allocate a significant amount of its loan to the ultra-poor farmers. Besides, the said bank should be discouraged to invest money in foreign business and non-agriculture sectors. Going beyond the function as mentioned in the charter, the BKB is wasting its time and money. Meanwhile, the bank is failing to achieve its target to promote farmers and agriculture enumerated in its charter. Investment in the foreign business and other commercial projects is the root of gradual loss and classified loans. As per Bangladesh Krishi Bank Order, 1973, the said bank should be confined to distributing loan to ultra-poor farmers. Its foreign business loan should be limited to agro-based-industries and products. The said bank should be cautioned in this regard. That the BKB has invited its destruction by being aloof from farmers is evident from the BB report. The BKB’s classified loan stood at Tk 6,406 crore till June 30, last year. At that time, its capital shortfall came to Tk 6,726 crore. Explaining information of the BKB’s 16 foreign exchange branches, BB said the amount of loan and advance till December 31 last year stood at Tk 3,613 crore which constitutes 24 percent of the total loan and advance of the said bank. Of the loan, non-agro commercial loan was Tk 1926 crore which was 53 percent of their total loan. At that time, foreign business loan of the AD branches estimated at Tk 1,600 crore which was 44 percent of the total loan of them. It means—the BKB disbursed 24 percent of its total loan through 16 AD branches while the rest third-fourth portion of its loan was distributed through 999 other branches of the bank. Lion share of the loan distributed by AD branches was given to the sole loan recipient. As the money was not recovered, the loan rendered classified. Scrutiny of loan disbursed by 1,015 branches of BKB showed that 80 branches allocated Tk 1 crore or more to one single recipient each. As of June 30, the loan and standing amount of advance stood at Tk 4,631 crore which constitutes 32 percent of the total loan and advance of the said bank. These branches are located at towns instead of rural areas. The amount of classified loan in these 80 branches is Tk 1,472 crore—which is 31 percent of the total default loan of the bank. Ibrahim Khaled, former chairman of BKB, told Kaler Kantho that it is not desirable at all that KBK would distribute loans to in commercial and external business instead of advancing loan to the farmers. The statistics of BB that the rate of loan disbursement among ultra-poor farmers is .91 percent does not appear credible to me. This should not be less than 60 percent under any circumstances. Courtesy: Kaler Kantho

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