Banks to miss targets on the Agriculture credit

Two major privatised banks and one provincial bank are likely to miss their targets for agriculture lending set for them by the State Bank of Pakistan.

Latest data released by the central bank shows that Habib Bank Limited (HBL), United Bank Limited (UBL) and Punjab Provincial Cooperative Bank (PPCB) are far behind their full-year targets at the end of first eleven months of the current financial year.

HBL has provided agricultural loans of Rs 16.83 billion against its full-year target of Rs 25 billion. UBL lent Rs 7.96 billion against a full year target of Rs 12 billion. PPCB has given Rs 5.97 billion in agricultural credit against its full year target of Rs 9 billion.

It seems highly unlikely that these banks would be able to lend enough to achieve their respective targets by the end of June.

However, lending of MCB Bank, which had disbursed only Rs 5.84 billion in the first ten months, jumped to Rs 12.72 billion in May, exceeding its target of Rs 9 billion.

Allied Bank Limited (ABL) also surpassed its target for agricultural credit. It has disbursed Rs 7.09 billion against its full-year target of Rs 6 billion.

Zarai Tariqati Bank Limited (ZTBL) disbursed credit worth Rs 47.003 billion against its full-year target of Rs 48 billion.

National Bank of Pakistan (NBP) extended agricultural loans of Rs 23.40 billion against its full-year target of Rs 28 billion.

The five commercial banks had lent Rs 54.59 billion to the farmers’ community in the first ten months, averaging Rs 5.459 billion a month. They lent around Rs 14 billion only in May, taking their total lending to agriculture at Rs 68.003 billion. They have a combined target of Rs 80 billion. A banker said that the lending increased on the account of large borrowing from farmers for the sowing of cotton crop. Besides, he said, wholesalers had borrowed huge amounts for stocking the commodity, which pushed up the figures of agriculture credit.

“Although it is actually commodity financing, banks add such amounts to their agriculture lending,” he added.

Fourteen other private banks, which were given a target of Rs 23 billion, disbursed Rs 20.78 billion. The central bank has raised the annual target for agriculture credit to Rs 160 billion for the current fiscal, which was up by Rs 23 billion from the last year.

source:www.dailytimes.com.pk