KARACHI, July 25: An overwhelming majority of the private commercial banks inducted during 2001-02 in the credit disbursement to farmers have shown contemptuous disregard to State Bank of Pakistan’s directive and have given less than 22 per cent of target loans.

Of the 13 private commercial banks, eight banks did not offer a single rupee loan to the farmers. Only the Bank of Punjab exceeded its target by about 118 per cent and four other private banks made just token loaning in the outgoing fiscal.

The eight banks that did not offer a single rupee farm loan in 01-02 are Bank Al Habib, Bank Al Falah, Faysal bank, Metropolitan Bank, Platinum Commercial Bank, Prime Commercial Bank, Soneri Bank and the Union Bank.

Out of a total loan target of Rs2.5 billion given to all 13 private banks, the eight banks that did not offer any loan shared a total target of Rs1,535m.

There was a proposal to associate foreign banks in the farming loan programme during the current fiscal year. After seeing the indifference of the domestic private banks, the policy makers in Islamabad are reported to have dropped this idea.

Bankers say that the Agricultural Credit Advisory Committee of the SBP had fixed a disbursement target of Rs 2.5 billion farm loans for 13 commercial banks during 01-02. Except for Bank of Punjab, all the banks failed to meet the target.

“The loan target was imposed on us,” the Chairman of the Private Domestic Banks Association is reported to have remarked in a meeting with the central bank. He was immediately rebuffed by Ashraf Janjua, the economic advisor to the State Bank, who chaired a meeting with the bankers. Janjua reminded the private bankers that target for each of the private commercial banks was fixed after due consultation.

Private bankers then took the plea that they lacked branch network and hence were unable to reach farmers in every nook and corner of the country. “Who stopped you from financing agro related projects like storages, marketing of agricultural produce, poultry and fishing,” was the question posed to the bankers. None of them had the answer.

All these bankers had offered less than 10 per cent of the allocated loan target in the first six months of 01-02 and stretched it to about 22pc in the full year.

Askari Commercial Bank was given the highest target of Rs425m and could meet hardly 50 per cent at the end June last when about Rs212m were reported to have been disbursed. Bolan Bank was expected to disburse Rs75m but provided only Rs21.5m which is hardly 29 per cent of the target. PICIC Commercial Bank offered about Rs20m loans to the farmers against a target of Rs85m. The Bank of Khyber was given a target of Rs160m but allocated Rs25.25m. The Bank of Punjab was given a target of Rs220m but gave away about Rs259m.

All these 13 private banks have been asked to offer Rs2.5bn loans to the farmers in the current fiscal year. The SBP is expected to maintain a close monitoring of this disbursement.