Bangladesh Bank yesterday instructed state-run commercial and specialised banks to take steps to withdraw or settle cases filed against farmers for defaulted agriculture loans.
The progress on the settlement of the certificate cases has to be reported to the Agricultural Credit and Financial Inclusion Department of the central bank on a monthly basis, it said in a notice yesterday.
It said steps have to be taken, upon consent from banks and clients, to recover unrealised loans within the provision of the defaulted loans, so the number of certificate cases filed against defaulted farmers does not go up in future.
The central bank ordered the state banks to beef up monitoring and set up separate units, if necessary, to recoup all agriculture loans, including the classified ones.
It suggested banks organise meetings at field level to raise awareness among farmers about the importance of using and paying back farm loans and also the consequence of certificate cases.
The banks were also asked to identify classified loans before they become defaulted, and regularise them and realise the loans by setting easy instalment.
“Steps aimed at postponing loan realisation, providing new loans and granting rescheduling facilities have to be taken in favour of farmers if they are affected by natural disasters,” said the central bank notice.
The notice came a week after the central bank held a meeting with senior officials of state banks on the issue.
The finance ministry recently issued a letter to the central bank, asking it to take initiatives to release the farmers from certificate cases.
Six state banks — Sonali, Janata, Agrani, Rupali, Bangladesh Krishi Bank and Rajshahi Krishi Unnayan Bank — filed certificate cases against more than two lakh farmers, according to data from Bangladesh Bank. Of them, arrest warrants were issued against 10,000.
Default loans involving the certificate cases stood at Tk 570 crore as of November last year.
A certificate case is filed by local magistrate courts against defaulter farmers.