KARACHI, Aug 23: Twenty-one banks involved in the disbursement of mandatory agricultural credit made Rs7.464 billion farm loans in July 2004. Senior bankers say this huge off take of farm credit in the first month of the fiscal year shows that the banks will easily meet the full-year credit disbursement target of Rs85 billion.

In the last fiscal year, all the twenty-one banks combined had disbursed Rs73.6 billion agricultural loans. The bankers say five major commercial banks made Rs3.579 billion agricultural loans in July 2004 against their full-year target of Rs38 billion.

State-run National Bank distributed the highest amount of farm credit i.e. Rs1.517 billion, followed by Habib Bank (Rs1.174bn); Muslim Commercial Bank (Rs434 million); United Bank (Rs388m) and Allied Bank (Rs64m).

The amount of agricultural credit offered by the first four banks appears to be in proportion to the full-year targets assigned to them by the State Bank. But Rs64 million credit disbursement by ABL is far less than what it should have keeping in view its full-year target of Rs3 billion. NBP is supposed to disburse Rs15bn farm credit, followed by HBL (Rs10bn) and MCB and UBL (Rs5 billion each).

The bankers say that Zarai Taraqiati Bank disbursed Rs2.318 billion farm credit in July 2004. Its full-year target is Rs34 billion. The Punjab Provincial Co-operative Bank made Rs1.026bn loan against its full-year target of Rs8 billion. Fourteen local private banks disbursed Rs541 million. They are supposed to make Rs5 billion farm loans during the current fiscal year.

The banks are: Askari Commercial Bank, Bank Al-Habib, Bank Alfalah, Bolan Bank, Faysal Bank, Metropolitan Bank, PICIC Commercial Bank, KASB Bank, Prime Commercial Bank, Saudi Pak Commercial Bank, Soneri Bank, The Bank of Khyber, The Bank of Punjab and Union Bank.

Representatives of the growers community say agricultural loaning has been on the rise after ZTBL lowered the mark-up on farm loans from 14 to nine per cent. "They have started charging lower markup," confirmed Syed Qamaruzzaman Shah, president of the Sindh Chamber of Agriculture. He said all other banks were also charging a maximum mark-up of nine per cent.

He said he had no knowledge about good borrowers getting loans from ZTBL at eight per cent as claimed by the bank but hastened to say "they might be doing this."

The veteran grower from Sindh complained that ZTBL branches were reluctant to offer farm loans to the those borrowers who had got their loan defaults settled under various schemes offered by the bank itself.

"When the growers who had availed of the facilities of loan settlements in the past go back to them to seek fresh financing they ask them to resettle the previous liabilities," he remarked.

"Now that is unfair. Why had they offered concessions for settlement of loans in the first place if they were to reopen the cases?" questioned Mr Shah. "This has become a common practice in Sindh," he said when asked to identify ZTBL branches doing this. ZTBL officials could not be reached immediately for their comment.

Mr Shah proposed that the State Bank should hold meetings of the Agricultural Credit Advisory Committee every three months so that the committee could monitor disbursement of agricultural credit more effectively. At present the committee meets twice a year.