KARACHI, June 26: Banks disbursed Rs37.6 billion agricultural loans in nine months to March 2003 — up from Rs35 billion disbursed in a year-ago period. “This performance is expected to improve further in the coming months because of the strong seasonal increase in disbursement of credit generally witnessed during the fourth quarter of a fiscal year,” says the SBP third quarterly report released here on Thursday.

The report says that in nine months to March 03 higher credit was availed in the Punjab while in other provinces it remained marginally lower than the corresponding period of last year. “The provincial distribution of credit when compared with the provincial breakup of area under important crops reveals...that the provinces are getting the share in credit in proportionate to the area under cultivation,” the report adds.

The report says that in contrast to the government sector the expansion in non-government sector credit by end-March 2003 was a spectacular Rs95.4 billion—more than twice the net credit expansion in the corresponding period of FY02; this improvement stemmed primarily from an exceptional Rs107.2 billion increase in net credit to the private sector.

The report says that strict financial discipline held the government requirements for July-March 2002-03 to Rs86.4 billion. Moreover, since no-discretionary financing inflow and privatization proceeds exceeded the government’s relatively modest requirements, net borrowings from the banking system totalling Rs52.5 billion were retired during this period.