Commercial and specialised banks have surpassed the Agricultural credit disbursement target of Rs 285 billion for the previous fiscal year 2011-12 (FY12). Banks extended loans amounting to Rs 293.8 billion to agriculturists, which is 8.8 billion (103 percent of annual target) more than the indicative target of Rs 285 billion set by the Agricultural Credit Advisory Committee (ACAC) for the whole fiscal year. It is 11.7 percent higher than agri loans worth Rs 263 billion disbursed in fiscal year 2010-11.
Five large banks collectively disbursed agri loans amounting to Rs 146.3 billion or 104 percent of their annual target of Rs 141 billion in FY12, higher by 4.3 percent against Rs 140.3 billion disbursed during the preceding fiscal year 2010-2011 (FY11). National Bank of Pakistan (NBP), Habib Bank Limited (HBL), MCB Bank, Allied Bank Limited (ABL) & United Bank Limited (UBL) surpassed their annual targets by achieving 106.0 percent, 103.5 percent, 103.3 percent, 102.8 percent and 100.7 percent, respectively. Zarai Taraqiati Bank Limited (ZTBL) was unable to achieve its indicative target and disbursed Rs 66.06 billion as against target of Rs 70.1 billion while Punjab Provincial Co-operative Bank Limited (PPCBL) has surpassed its annual target of Rs 7.6 billion and disbursed Rs 8.5 billion during FY12. Fourteen Domestic Private Banks as a group achieved 112.5 percent of their target (Rs 54.1 billion) by disbursing agri.
loan of Rs 60.9 billion. The Bank of Khyber, Bank Al Habib, Faysal Bank, Soneri Bank, NIB Bank and Askari Bank surpassed their annual agri credit disbursement targets by achieving 174.6 percent, 147.6 percent ,136.7 percent,132.4 percent, 104.1 percent and 100.4 percent disbursements, respectively, while the remaining banks could not meet their annual targets. Five Microfinance Banks as a group disbursed agri loans of Rs 12.1 billion over the annual target of Rs 12.2 billion during FY12. The banks had previously been missing their agricultural credit disbursement targets since 2008-09 because of slow demand for agri loans followed by floods.
Achievement of agri credit disbursement target during the year ended June 2012 was extremely difficult in the backdrop of continuous declining trend in the overall Private Sector Credit and high agri Non-performing Loans (NPLs) of major banks after the devastating floods in 2010 and heavy rains in 2011 in Sindh. However, SBP adopted a multi-pronged strategy and made all out efforts in achieving the target of Rs 285 billion allocated by ACAC. The efforts of SBP officials not only helped banks in achieving their target but also surpassing it.
These efforts included swift settlement of crop loan insurance claims, close co-ordination with provincial revenue departments to facilitate the One-Window Operation in farming intensive districts for timely completion of revenue formalities, holding of farmers” awareness and financial literacy programmes at grass-root level, and follow-up of targets with top managements of banks and heads of their agri units. The contribution by SBP BSC field offices in monitoring regional targets was also helpful.
Copyright Business Recorder, 2012