Non-Performing Loans (NPLs) of agricultural sector surged by Rs 2.1 billion to Rs 34 billion during the last calendar year because of floods across the country. The SBP revealed that NPLs under the head of agriculture financing surged by 6.56 percent to a peak level of Rs 34.1 billion or 18 percent of the outstanding loans as on December 31, 2010 compared with Rs 32 billion or 17.7 percent of the outstanding loans as on December 31, 2009.
The Agricultural Credit Advisory Committee (ACAC) had set an indicative agricultural credit target of Rs 270 billion for current fiscal year (2010-11). The target was 8.8 percent higher than the disbursement of Rs 248 billion in last fiscal year (2009-10). Out of the total target, Rs 181.3 billion were allocated to commercial banks, Rs 81.8 billion to ZTBL and Rs 6.9 billion to Punjab Provincial Co-operative Bank Limited. Although, the SBP has enhanced the targets for the current year, but at the same time NPLs have also shown a slight increase, as three provinces of the country witnessed massive floods in August last year. The flood destroyed standing crops, of which growers were unable to pay off their already obtained loans.
According to the SBP, NPLs of five leading commercial banks and PPCBL witnessed some decline, while domestic private banks and Zarai Taraqiati Bank Limited (ZBTL) NPLs moved up. Major increase was registered in NPLs of ZBTL, which went up by Rs 4.2 billion to Rs 18.2 billion in December 2010. NPLs of five leading commercial banks declined by Rs 0.9 billion to Rs 6.4 billion in December 2010 as compared to Rs 7.5 billion December 2009. NPLs of domestic private banks surged by Rs 300 million to Rs 4.8 million. In addition, with a decline of Rs 900 million the NPLs of PPCBL stood at Rs 4.9 billion from Rs 5.8 billion during the same period.
Similarly, bank-wise break up of agri credit disbursement reveals that during first half of FY11, five major banks as a group disbursed Rs 55.0 billion or 41.5 percent of their annual targets, ZTBL disbursed Rs 21 billion or 25.7 percent of the target, Domestic Private Banks (DPBs) disbursed Rs 22.7 billion or 46.4 percent of the target, while PPCBL disbursed Rs 2.9 billion or 42 percent of the whole year's target.
During October-December, 2010 five major banks as a group disbursed Rs 29.1 billion or 22.0 percent of their whole year targets, ZTBL disbursed Rs 15.7 billion or 19.2 percent of targets, Domestic Private Banks (DPBs) disbursed Rs 13.3 billion or 27.2 percent of targets and PPCBL disbursed Rs 2.0 billion or 29.0 percent of targets.
Sector-wise classification reveals that during 1st half of FY11 out of disbursement of Rs 101.6 billion, an amount of Rs 65 billion or 64 percent was disbursed to farm sector and Rs 36.6 billion or 36 percent to non-farm sector as compared with disbursement of Rs 73.8 billion and Rs 32.5 billion respectively during the corresponding period lst year.
During October-December, 2010 quarter out of Rs 60.1 billion disbursement, an amount of Rs 39.0 billion or 64.9 percent was disbursed to farm-sector and Rs 21.1 billion or 35.1 percent to non-farm sector, while during the corresponding period last year, 71.0 percent agri credit was extended to farm sector and 29.0 percent to non- farm sector. Increasing trend in non-farm sector credit disbursements is mainly due to sustained disbursement.
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