Role of RAKUB in agricultural development of the northwest region of Bangladesh

--Md. Emdadul Hoque

Md. Emdadul Hoque

Rajshahi Krishi Unnayan Bank is a state-owned specialized bank. The bank started functioning on 15 March 1987 by taking over the assets and liabilities of the Bangladesh Krishi Bank within Rajshahi division (presently Rajshahi and Rangpur divisions). Like other commercial banks RAKUB conducts all sorts of commercial functions. However main objective of the Bank is to cater to the agricultural credit need of the farmers of the area. The Bank is regulated by the Bank & Financial Institutions Division of the Ministry of Finance and Bangladesh Bank. The board of directors of the Bank constituted by the government decides the policy matters of the Bank.

Agriculture is the mainstay of the economy of the country. Contribution of agriculture in the GDP is about 19 percent. It is still the single largest contributor in GDP. Average growth of GDP in the last five years was 6.3 percent as a result of agriculture-friendly activities of the government. Rajshahi Krishi Unnayan Bank as a specialized bank has undertaken various programs for the economic development of the North-west region. The Bank has been conducting its operations efficiently through 376 branches located in Rajshahi and Rangpur divisions and the lone branch in Dhaka, Dhaka corporate branch. But the Bank is beset with shortage of manpower which has been impeding the normal activities of the Bank. RAKUB finances in various rural economic activities including crops, fishery, animal resources, farm machinery and irrigation equipment, agro-based industries, small and medium industries, SMEs, poverty alleviation programs for rejuvenating rural economy and thereby contribute in employment generation and increasing purchasing power of common people. The Bank thus contributes in socio-economic development of the region by increasing food grain production and meeting the demand of protein.

Rajshahi Krishi Unnayan Bank was established with the aim of development of the farmers of the north-west region. The Bank conducts its activities to that end. The Bank earmarks 60 percent of its lending target for crop production. Rajshahi and Rangpur divisions accommodates one-fourth of the country’s population. The region is known as the granary of the country. The country is now at the threshold of food autarchy. RAKUB has contributed a great deal in country’s food grain production. RAKUB has been financing in all other sub-sectors of agriculture including agro-based industries. Besides the Bank provides cash credit for agri-business. During the financial year 2013-2014 the Bank disbursed an amount of Tk. 1430.91 crore against targeted amount of Tk. 1450.00 crore (98.68%). Loan disbursement target for the current financial year has been fixed at Tk. 1600.00 crore.

The Bank has 900,000 borrowers. The loans taken by borrowers created opportunities for employment generation. Many unemployed youths have been employed in various RAKUB financed projects. Loans for production of high value crops are disbursed among farmers under NCDP project through BRAC, Proshika, RDRS and GKF. The Bank disburses SME loans through RAKUB Small Enterprise Credit Project (SECP) for employment generation. The project, SECP has turned to be RAKUB-SME Financing Company Limited, a subsidiary company of the Bank.


Of late to ensure transparency in operation RAKUB has taken an initiative to disburse loans among farmers in presence of local administration, public representative and local elites. Loans are disbursed in promotional rate of four percent and on easier terms for import substitution of pulses, Oilseeds, Spices and maize production. The board of directors has formulated policies for disbursement of loans on easier terms among freedom fighters and small ethnic communities.

To encourage savings among all sections of the people of the Northwest irrespective of age and occupation various savings schemes including school banking and RAKUB Grihini Sanchay Scheme (RGSS) has been introduced. The Bank has reached the milestone of deposit-base of Tk. 3000 core and has secured second place among the scheduled banks in respect of number of school banking accounts opened in the country.

The Bank management regularly monitors the activities of officers and other staff in regards to approving and disbursing loans. The chairman of the board of directors pays occasional visits to the branches and offices of the Bank for keeping an eye on bank’s activities including loan disbursement. His directives to the employees help create awareness about better customer service. Along with building a bright image, Rajshahi Krishi Unnayan Bank has been making significant contribution towards development of the people of the Northwest region as a result of the efforts of the directives of the Board of Directors, able guidance by the management, cooperation extended by the administration and hard work of the employees of the Bank.