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Download PDF Bangladesh Bank (BB) Governor Salehuddin Ahmed yesterday said the central bank is measuring the possibilities of waiving agriculture loans in the Sidr-hit districts in the country’s southwest region.
“We will assess the ways of waiving bank loans as well as its implications in the banking sector and then submit a proposal to the government authorities concerned,” Salehuddin told newsmen in reply to a query in reference to a similar request to banks and NGOs made by the army chief.
The BB governor was briefing the newsmen at his office on his recent visit to two Sidr-hit districts–Barisal and Khulna.
The central bank has also set a target of distributing Tk 1,700 crore as agriculture loans in the two regions to recover agricultural damage in the area due to cyclone Sidr.
On waiver of loans given by NGOs, Salehuddin said the non-government organisations are discussing the issue among themselves and the government hopes that they will reach a decision soon.
The central bank governor, however, said only credit facilities will not be a successful way to recover economy. He stressed the need for proper and timely supply of fertiliser, seeds and irrigation for increased agricultural production.
Salehuddin said if the government decides to waive the agri-loans in the cyclone-hit areas, it will not be a major burden for the country’s economy.
Asked about the nature of the possible impact of such loan-waiver on the economy, he said, “It will be possible for the central bank to make comments on the possible impact on the economy a few days later. We will have to keep the order of financial discipline of banking system.”
On the BB plan to distribute agri-loans in Khulna and Barisal, he said, “Of the amount, Tk 1,300 crore will be distributed among farmers of Barisal region and the rest Tk 400 crore in Khulna region.” The state-owned banks will provide the loans.
During his visit to Barisal and Khulna this week, the BB governor asked the local branches of the state-owned banks to distribute at least 70 percent of the targeted loans by this month.
He said the chief executive officers of the state-owned banks have been asked to monitor the distribution of agri-loans for proper and quick disbursement. The BB will also monitor the process, he added.
The central bank governor said he will hold separate meetings with the top brass of the state-owned and private commercial banks and request them to provide loans to small and medium entrepreneurs in the cyclone-hit areas.
“We will ask the banks to disburse loans not only to farmers, but also to fishermen and small shopkeepers,” he said, adding that the people of these areas will need loans also for renovation and building new houses.
“Interest-free loans to the cyclone-affected people is another option to help them,” the BB governor said. The Palli Karma Sahayak Foundation (PKSF) has already initiated distribution of such loans, he added.
Salehuddin said as the private banks have no branch in the cyclone-hit areas they will be asked to divert their funds to Krishi Bank and NGOs.
Stressing the importance of the private banks’ participation in the rehabilitation of the cyclone-hit people, he said, “Currently, we evaluate performances of the commercial banks through camel rating, but in the future we will also consider their contribution to the national economy.” He termed such contribution a new parameter for performance rating.
He identified forcing the economy towards a stable state as one of the major challenges for the government at present. “We will have to implement all decisions quickly for this,” Salehuddin said.
The BB is studying possible impacts of good grain import and increased price of petroleum on the country’s economy.
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