RAKUB emerges as a bright star of rural economy in northwest Bangladesh

--Md. Sazammul Islam

Md. Sazammul Islam

Rajshahi Krishi Unnayan Bank (RAKUB) established by the President’s Ordinance No. 58 of 1986 started functioning as a specialized bank on 15 March 1987. It took over the operations of 253 branches of Bangladesh Krishi Bank (BKB) within Rajshahi division. The Bank started with authorised capital of Tk. 1500 million, paid up capital of Tk. 50 million, loans and advances of Tk. 5638.30 million and deposit amounting to Tk. 518.30 million. Presently the Bank commands a network of 376 branches with authorised capital of Tk. 7500 million, paid up capital of Tk. 5700 million and loans and advances of Tk. 44505.90 million.

RAKUB has been making contribution as a development partner towards development of agriculture and agro-based industries and agribusiness and socio-economic development of Northwest Bangladesh. RAKUB caters to a considerable part of country’s agriculture credit for exploitation of the potentials of Rajshahi and Rangpur divisions.

To steer the bank in accordance with the government policies there is a Board of Directors in RAKUB. The board under the chairmanship of Professor Dr. M. Shah Nowaz Ali has been making efforts to implement the policies of the present farmer-friendly government. The board and the bank management have been making concerted efforts to turn the bank to be a profitable concern.

RAKUB helps in attaining food security for the ever increasing population of the country, attaining self-sufficiency in food production and sustainable economic development through rural poverty alleviation. RAKUB chalks out its annual credit program in accordance with the rural and agricultural credit policy of the government and earmarks 60 percent of its credit operation in the three priority sub-sectors of crop, fishery and animal resources. The bank disburses loans for irrigation equipment and farm machinery on easier terms. Besides, RAKUB extends credit for 19 crops for import substitution of pulses, oilseeds, spices and maize at promotional rate of four percent. A program has been introduced for providing credit facilities of Tk. 300,000 per borrower on easier terms and promotional rate to overseas job seekers. As majority branches of the bank are located in the rural areas, RAKUB has been making effective contribution in bringing positive changes in rural economy. RAKUB has been keeping pace with other banks in adoption of information technology. The bank has made partnership with Dutch-Bangla Bank Limited in providing Mobile Financial Service through its branches. RAKUB by its branches distribute foreign remittance to the recipients through Western Union and thus contributes to the country’s foreign exchange earnings.

SMEs in today’s perspective are considered to be an important tool in making contribution to the country’s economic growth. RAKUB has been extending credit facilities for SMEs in accordance with Bangladesh Bank’s policies and norms in this regard. RAKUB has also been making contribution to women empowerment by giving priority to women entrepreneurs in SMEs. Not only that, the Bank also takes care even after loan delivery by regular monitoring and advisory services. The bank caters to individual/group-based lending programs aimed at self-employment and income generation in on-farm as well as off-farm activities for socio-economic development through boosting rural economy.

ZM Con. Raj

It is painful to observe that the freedom fighters still have to go through hardships over four decades of independence. The Bank has undertaken a special lending program for poor freedom fighters and families of martyred freedom fighters and also for the poor aborigines living in the RAKUB region. Again, a program entitled ‘Zero Poverty Special Credit Program’ has been introduced for poor ‘Monga’ affected people of greater Rangpur. RAKUB serves the people by providing credit under such programs at lower rate than cost of lending. The bank has opened Ten-Taka farmers’ account for distributing agriculture subsidy. It distributes allowance for aged people, destitute and divorcee women under social safety-net programs.

For performing these jobs there is a strong fund management unit in RAKUB. The unit works for reducing dependence on Bangladesh Bank’s refinance and demand loan and depends on its own fund in stead. Field level offices, i.e. zones are encouraged to be self-sufficient in fund management. New products of the bank have been successful in attracting huge number of depositors. All these efforts have contributed in building up a robust deposit base of Tk. 30468.50 million by the end of financial year 2013-2014. Presently the bank commands a deposit base of Tk. 32000 million.

RAKUB in its way forward has become an important development partner of the government. RAKUB has accumulated loss as an aftermath of providing service at lower rates, interest waiver programs of the government, burgeoning recalcitrant defaulters etc. In spite of all these, the bank has taken all out efforts to improve performance by adopting measures of increasing income and reducing expenses and thus emerges as a profit making bank in Bangladesh.