The major occupation of the people of Bangladesh is ‘agriculture’. Agriculture is the single largest producing sector of the economy since it comprises about 30% of the country’s GDP and employs around 60% of the total labor force. The performance of this sector has an overwhelming impact on major macroeconomic objectives like employment generation, poverty alleviation, human resources development and food security. A bank is just like the heart in the economic structure and the capital provided by bank is just like the blood in it.
The economy of Bangladesh is mainly dominated by agriculture, that is why if the finance is not provided to the agricultural sector, the growth of the economy will be slowed down. Loan facility provided by the bank works as an incentive to the producer to increase production. Keeping this in mind, for the purpose of the development of agricultural sector, the Government of Bangladesh has established two specialized banks, namely- Bangladesh Krishi Bank (BKB) and Rajshahi Krishi Unnayan Bank (RAKUB). These banks are continuously trying to provide support for the advancement and development of the agricultural sector of the country. First of all, they are promoting savings, mostly from middle and lower middle class of urban and rural people. Secondly, these banks promote investment in different sectors of agriculture, industry and trade. They either invest directly or advance loan to the investors. They are continuously helping the disadvantaged people to become self sufficient and self dependent by providing them micro credit.
Rajshahi Krishi Unnayan Bank was established by the President’s Ordinance No. 58 of 1986. It took over the operations of 253 branches of Bangladesh Krishi Bank of the then Rajshahi administrative division (presently Rajshahi and Rangpur divisions) with the aim of providing institutional agricultural credit for optimum utilization of agricultural potentials of Rajshahi Division. Taking over the branches and offices along with assets and liabilities the bank started functioning on 15 March 1987. RAKUB is the only specialized nationalized bank having its head office outside Dhaka, i.e. at Rajshahi.
As the largest development partner in the northwest region, RAKUB aims at overall development of farmers and all the sectors and sub-sectors of agriculture in this region. Besides catering to agricultural credit, the bank performs ancillary functions as financing agri-business and agro-based industries and poverty alleviation programs. Authorized capital of the bank is Tk.7500 million and paid-up capital is Tk. 5700 million only. There are 18 independent zonal offices for operational activities and 18 separate zonal audit offices for conducting regular audit in branches and zonal offices. At present (as of 30-06-2014) there are 376 branches of the bank including LPO and Dhaka branch among which 190 are in Rajshahi and 184 in Rangpur division. Number of rural branches are 307 while urban 69.
RAKUB caters to financing of all the agricultural activities including crop production, fishery, animal resource, irrigation equipment and farm machinery, crop processing and marketing, agro-industries and agri-business. The bank pays importance to financing poverty alleviation and employment generation activities, SME and other off-farm activities. RAKUB continues financing to widen and expand small and medium enterprises as well as agro-based industries, cash credit program and other project loans aiming extension of employment opportunities to reduce unemployment and poverty alleviation in line with the government’s policy of industrialization. Meanwhile, by the virtue of a strong and effective Board of Directors, especially on behalf of dynamic leadership of the chairman of the Board, Professor Dr. M Shah Nowaj Ali, credit limit for individuals and enterprises engaged in small and medium industries has been increased to Tk.100.00 million from Tk. 50.00 million irrespective of products. For the wise decision and developing policy of the Board of Directors, last 3 years RAKUB financed Tk. 28056.50 million among 12 agro-based industries as industrial loan and Tk.145831.70 million as working capital for the production of those industries.
The existing collateral-based banking system is also of little use in respect of extending support to the millions of landless people. To address the problem, the Bank has been financing collateral-free agricultural credit as ‘Borgachashi loan’ to those landless people who are actually farmes and related to crop production and other micro-credit for income and employment generation through its poverty alleviation credit programs. The Bank finances for production of all the summer and winter crops, horticulture and nursery etc. The bank disburses 80 percent of its annual target for crop production. The loan outstanding of the bank is Tk.41568.10 million and number of borrowers are 863549 (as on 30.06.2014). It extends credit facilities for systematic and commercial livestock farming which includes dairy, beef-fattening, poultry, raising and setting up of hatcheries which in turn is expected to increase production of milk, meet and eggs, the main source of protein in today’s technology-based farming of high yielding and high-value crops, mechanization of cultivation, irrigation and pest-control is indispensable. To cope with the situation, the Bank also provides financing for power tillers, tractors, fertilizer and pesticide application devices etc. The bank also provides financing for many other agro-based industries. These agro based industries are poultry farm, dairy farm, food processing plant, cold storage, automatic brickfield, fish freezing and processing industries etc.
Northwest Crop Diversification Project (NCDP)
This ADB financed project finances for high-value crop production. Four NGOs namely BRAC, RDRS and GKF draw loan from RAKUB and re-lends among farmers.
Small Enterprise Credit Program (SECP)
This project is jointly funded by the Royal Norwegian government and RAKUB. It aims at promotion of entrepreneurship in agro-based small enterprises and non-farm activities. The main objective of the project is to create employment through development of small enterprises. It gives priority to financing the women entrepreneurs. Maximum credit limit for a single enterprise is Taka 0.50 million. The project provides training to the entrepreneurs. Now the project has been converted into a subsidiary company of RAKUB.
RAKUB renders all sorts of deposit banking services to its over three million valued customers. The Bank operates deposit accounts like Savings Bank Accounts, Current Deposit Accounts, Short Term Deposit Accounts, Fixed Deposit Accounts and many other attractive deposit schemes. Though a specialized bank, it performs most deposit banking activities like commercial banks. Special products of the bank include deposit schemes are: i) RAKUB Savings Scheme (RSS), ii) Krishak Shanchay Scheme (KSS), iii) RAKUB Daily Profit Scheme (RDP), iv) RAKUB Grameen Pension Scheme (RGPS), v) RAKUB Monthly Profit Scheme (RMPS), vi) RAKUB Monthly Savings Scheme (RMSS), vii) RAKUB Millionaire Deposit Scheme (RMDS).
Corporate Social Responsibility (CSR)
To develop CSR engagements and practices the bank has taken up lending programs at lower rate of interest like –
Special Credit Program for Freedom Fighters,
RAKUB Special Credit Program for Small Ethnic Communities,
Special Credit Program for Government Primary School Teachers,
Credit Program for Overseas Employment,
Collateral-free Group-based Credit Program for the Landless and Sharecroppers,
Credit Program for Production of Pulses, Oilseeds, Spices and Maize at 4% promotional rate of interest and
Green banking programs like biogas and solar plants.
CSR also includes participation in the government’s social safety-net programs like distribution of allowances for aged people, widow and destitute women, physically challenged persons with scanty means, primary education stipend etc.
RAKUB has been established a training institute for the personnel training and human resource development under a separate department. RAKUB has own techniques to evaluate their employees’ performance.
RAKUB continuously suffers to shortage of manpower from the very beginning. At the time of establishment of RAKUB, there were 253 branches but at present (30.06.2014) it increased to 376. On the other hand, then the deposit amount was Tk.5183.00 million which is now raised to Tk.30468.50 million.
From the very beginning loans and advance of the bank was 5638.30 million but at present it increased to 41159.35 million, increasing rate is 730%. Number of customers were 1064531 but now it increased to about 4293498. Comparatively the activities of the bank enlarged in the field of every section than of 1987 but the manpower is not been increased at all. So the customer service is strongly hampering for the shortage of manpower now a days. It is hopeful that the honorable chairman of the board of directors successfully made approval of a new organogram for the bank of 5982 numbers of manpower which will bring positive result for the bank.
Gradually the bank is going to be recruited more than 1500 officers and staff within three years and the activities of recruitment has already been started. Within the next two months the procedure of recruitment about 500 officers and staff has been completed. Then the problem of manpower shortage is solved somewhat. So in this year of 2014-2015 we hope that the target of achieving deposit Tk.3800.00 crore and decreasing the classified loan amount under 25% among total loans would be successful and the bank will go ahead.