Non-Performing Loans (NPLs) of agricultural financing has posted a surge of 11 percent to Rs 32 billion as on December 31, 2011, reportedly, due to post flood effects and high cost of production. Sources in banking sector told Business Recorder on Monday that despite healthy growth in the agricultural sector followed by bumper crop of cotton and sugarcane, NPLs of agricultural sector are on rise.
According to State Bank of Pakistan's statistics, NPLs of agricultural financing have registered a pronominal increase of 11.11 percent during last calendar year 2011 (CY11). With current increase, overall NPLs in agricultural financing have mounted to Rs 32 end of CY11 as compared to Rs 28.8 billion in CY10, depicting an increase of Rs 3.2 billion.
Among overall banking industry, NPLs of big five banks, Domestic Private Banks and Zarai Taraqiati Bank Limited have witnessed upward trend during the period under review. Largest specialised institution-Zarai Taraqiati Bank Limited has major share in the overall NPLs of agricultural financing. NPLs of ZBTL have mounted up by 21 percent during the last calendar year.
With an increase of Rs 3.3 billion, overall NPLs of ZBTL have reached Rs 19.2 billion as on December 31, 2011 from Rs 15.9 billion as on December 31, 2010. NPLs of big five banks including National Bank of Pakistan, MCB Bank, Habib Bank Limited, Allied Bank Limited, United Bank Limited, under agricultural financing have increased to Rs 6.7 billion from 6.3 billion, showing an increase of Rs 0.4 billion in CY11. During the under review overall outstanding loans of these five banks have surged to Rs 65.2 billion in CY11 from Rs 54.4 billion in CY10.
NPLs of domestic private banks have gone up by Rs 0.4 billion to Rs 4 billion with Rs 25.2 billion of outstanding loans end of CY11. Punjab Provincial Co-operative Bank Limited's (PPCBL) NPLs under agricultural financing have stood at Rs 2.1 billion down from Rs 3 billion. While during the period outstanding loans of PPCBL surged to Rs 7.9 billion end of CY11 from Rs 6.8 billion in CY10.
According to SBP the number of agricultural loan borrowers was 1.973 million as on December-11, as against 1.783 million as on December-10, showing an increase of 11 percent YoY mainly due to inclusion of borrowers of MFBs. Bank-wise position of outstanding number of borrowers reveals that decrease in number of borrowers was witnessed in five major banks, ZTBL and DPBs; whereas borrowers of PPCBL rose modestly by 7.5 percent.
"High mark-up rate, increasing NPLs and defaults in repayment due to a variety of reasons, resulted in the decline in outstanding number of borrowers in the stated banks", bankers said. It may be recalled that the State Bank of Pakistan has enhanced agricultural credit disbursement target by Rs 15 billion and set a target of Rs 285 billion for the current fiscal year 2011-2012.
Comments
Comments are closed for this article.