July-October agriculture credit disbursement down 10 percent

Agriculture credit disbursement by commercial and specialised banks posted a sharp decline of 10 percent year-on-year to Rs 56.694 billion in the first four months (July-October) of FY11 due to floods in the country. Source in banking sector told Business Recorder on Monday that floods across the country badly affected agricultural and banking activities in rural areas, of which disbursement is on decline.
However, they believed, during the second half of current fiscal year agri credit disbursement will witness massive surge due to rising agricultural activities. In absolute terms, disbursement of credit to the agriculture sector decreased by over Rs 6.145 billion in July-October, 2010 as compared with total disbursement of Rs 62.839 billion in the same period last year. Total disbursement during July-October 2010, is some 22 percent of indicative target of Rs 270 billion set by the State Bank of Pakistan for current FY11.
Sharp decline has been posted by Zarai Taraqiati Bank Limited and five major commercial banks, while Punjab Provincial Co-operative Bank Limited and 14 other private banks posted a slight increase. Overall credit disbursement by five major commercial banks including Allied Bank Limited, Habib Bank Limited, MCB Bank Limited, National Bank of Pakistan and United Bank Limited registered a decline of 5 percent during the period.
Agri credit disbursement by five major commercial banks stood at Rs 35.134 billion in July-October, 2010 compared with Rs 36.915 billion in same period last year, depicting a decrease of Rs 1.781 billion. During the period Allied Bank Limited disbursed Rs 5.519 billion, Habib Bank Rs 8.808 billion, MCB Bank Rs 5.589 billion, National Bank of Pakistan Rs 12.068 billion and agri credit disbursement by United Bank stood at Rs 3.149 billion.
Zarai Taraqiati Bank Limited, the largest specialised bank, as it has disbursed a total of Rs 7.981 billion in July-October 2010, declined by 45 percent or Rs 6.604 billion as compared with Rs 14.585 billion disbursement in the same period last year. Disbursement by Punjab Provincial Co-operative Bank Limited (PPCBL) and 14 private commercial banks surged by 73 percent and 17 percent respectively.
Agri credit disbursement by PPCBL stood at Rs 1.206 billion in July-October, 2010 compared with Rs 694.427 million in corresponding period last year. Besides, 14 domestic private banks also loaned a combined Rs 12.373 billion in first four months of current fiscal year against disbursement of Rs 10.644 billion in same period of last fiscal year, depicting a surge of Rs 1.79 billion. Recently, the State Bank of Pakistan has enhanced agri credit disbursement target by Rs 10 billion and set an indicative target of Rs 2270 billion for FY11.