Rs 2 billion surge in NPLs of Agri loan

RIZWAN BHATTI

KARACHI: Non-performing Loans (NPLs) of agricultural sector has surged by Rs 2.1 to Rs 34 billion during the last calendar because of flood across the country.

The State Bank of Pakistan has revealed that NPLs under head of agriculture financing has surge by 6.56 percent to peak level of Rs 34.1 billion or 18 percent of the outstanding loans as on December 31, 2010 compared with Rs 32 billion or 17.7 percent of the outstanding loans as on December 31, 2009.

The  Agricultural  Credit  Advisory  Committee  (ACAC)  had  set  an indicative agricultural  credit  target  of  Rs  270  billion  for current fiscal year (2010-11). The target was 8.8 percent higher than the disbursement of Rs 248 billion in last fiscal year (2009-10). Out of the total target, Rs 181.3 billion were allocated to commercial banks, Rs 81.8 billion to ZTBL and Rs 6.9 billion to Punjab Provincial Cooperative Bank Limited.

Although, SBP has enhance the targets for the current year, as the same time NPLs has also shown a slight increase, as three agricultural provinces of the country have witnessed flood in August last year. The flood has destroyed standing crops, of which growers were unable to payoff their already obtained loans.

According to the SBP NPLs of five leading commercial banks and PPCBL has witnessed some decline, while Domestic Private Banks and Zari Traqiyati Bank Limited (ZBTL) NPLs have gone up.

Major increase has registered in NPLs of ZBTL, which gone up by Rs 4.2 billion to Rs 18.2 billion in December 2010. NPLs of five leading commercial banks has declined by Rs 0.9 billion to Rs 6.4 billion in December 2010 as compared to Rs 7.5 billion December 2009. NPls of Domestic Private Banks has surged by Rs 300 million to Rs 4.8 million. In addition, with a decline of Rs 900 million the NPLs of PPCBL stood at Rs 4.9 billion from Rs 5.8 billion during the same period. Similarly,

Bank-wise break up of agri. credit disbursement reveals that during first half of FY11, five major banks as a group disbursed Rs. 55.0 billion or 41.5 percent of their annual targets, ZTBL disbursed Rs 21 billion or 25.7 percent of the target, Domestic Private Banks (DPBs) disbursed Rs 22.7  billion or 46.4 percent of the target, while  PPCBL  disbursed Rs 2.9 billion or 42 percent of the whole year’s target.

During Oct-Dec, 2010 five major banks as a group disbursed Rs 29.1 billion or 22.0 percent of their whole year targets, ZTBL disbursed Rs 15.7 billion or 19.2 percent of targets, Domestic Private Banks (DPBs) disbursed Rs 13.3 billion or 27.2 percent of targets and PPCBL disbursed Rs 2.0 billion or 29.0 percent of targets.

Sector-wise classification reveals that during 1st  half of FY11 out of disbursement of Rs 101.6 billion, an amount of Rs 65 billion or 64 percent was disbursed to farm sector and Rs 36.6 billion or 36 percent were disbursed to non- farm  sector  as  compared  with    disbursement  of  Rs  73.8  billion  and  Rs  32.5  billion  respectively  during  the corresponding period last year.

During Oct-Dec, 2010 quarter out of disbursement of Rs 60.1 billion, an amount of Rs 39.0 billion or 64.9 percent was  disbursed  to  farm-  sector  and  Rs  21.1  billion  or  35.1  percent  to  non-farm  sector,  while  during  the corresponding period last year, 71.0 percent agri credit was extended to farm sector and 29.0 percent to non- farm sector. Increasing trend in non farms sector credit disbursements is mainly due to sustained disbursement.