SBP sets Rs285bn agri credit target

RIZWAN BHATTI

KARACHI: The State Bank of Pakistan has set an indicative target of Rs 285 billion for the agricultural credit disbursement through commercial, specialised and microfinance banks during current fiscal year.

The proposed target is some 5.55 percent higher than the last fiscal year's target and is also about 8.3 percent more than total disbursement of fiscal year 2010-11 (FY11).

Sources in banking industry told Business Recorder on Thursday that the SBP for the first time has fixed a separate target for microfinance banks (MFBs) and major part of increased target has diverted towards this segment.  In addition, Standard Chartered Bank has been de-listed from domestic private banks, which are providing agri loans, as despite indicative target, SCB was not lending to the agricultural sector for three years. For the last fiscal year an indicative target of Rs 300 million was set for SCB but it failed to disburse even a single penny under this head. Bank's outstanding amount under agri credit stood at zero on June 30, 2011.

At the same time, for the first time Sindh Bank has been included in the list of domestic private banks and an indicative target of Rs 1.2 billion set for the bank.

The SBP has set an indicative target of Rs 285 billion for FY12 as compared to Rs 270 billion for FY11, depicting an increase of Rs 15 billion. The indicative target is also Rs 22 billion higher than total agri credit disbursement during last fiscal year, as commercial and specialised banks had disbursed Rs 263 billion against indicative target of Rs 270 billion for FY11. Overall, banks had achieved 97 percent agri credit target during last fiscal year despite devastating floods.  The SBP has enhanced agricultural credit disbarment target of commercial banks - largest lender of agri loans - by Rs 8.85 billion to Rs 141 billion from Rs132.450 billion. Among commercial bank, Allied Bank of Pakistan will disburse Rs 17.6 billion, Habib Bank Limited Rs 33 billion, MCB Bank Rs 27.2 billion, National Bank of Pakistan Rs 43.2 billion and Unite Bank Limited Rs 20 billion.

However, target of Zarai Taraqiati Bank Limited has reduced, as its disbursement was much lower than actual target of Rs 81.8 billion during the last fiscal year. For the current fiscal year, ZBTL has given a target of Rs 70.1 billion. While, disbursement through Punjab Provincial Co-operative Bank Limited (PPCBL) rose to Rs 7.6 billion from Rs 6.85 billion, up by Rs 75 million.

Agri credit disbursement target for 13 domestic private banks has risen by Rs 5.2 billion to Rs 54.1 billion from Rs 48.9 billion. Among domestic private banks Askari Bank will disburse Rs 13.3 billion, Bank Al-Habib Ltd 9.6 billion, Bank Alfalah Rs 9.5 billion, My Bank Ltd Rs 200 million, Faysal Bank Ltd Rs 9 billion, Habib Metropolitan Bank Ltd Rs 200 million, NIB Bank Rs 900 million, KASB Bank Rs 600 million, Silk Bank Rs 700 million, Soneri Bank Rs 3.3 billion, The Bank of Khyber Rs 600 million and The Bank of Punjab Rs 5 billion.

In addition, cumulatively MFBs for the first time gave an indicative target of Rs 12.2 billion for current fiscal year. Out of total agri credit disbursement target Khushhali Bank and NRSP will be leading lender and will be disbursed over 75 percent of total target of MFBs. Khushhali Bank and NRSP have been given a target of Rs 4.3 billion each. Tameer Bank has been asked to disburse Rs 20 million, Pak Oman Rs 80 million and First MircoFinance Bank Rs 3.5 billion.

Bankers are confident that indicative target of agricultural credit disbursement, which has not been achieved for two year, will be easily met as for the first time MFBs have been given targets.  They said during last fiscal year devastating floods across the country badly disturbed the agri loan disbursement process as flood damaged vast agriculture infrastructure and caused huge losses to standing crops.