Farm credit included in CAMELS rating

The central bank has included agriculture loan distribution condition in the criteria to determine CAMELS ratings of banks.

The bank made the disclosure on Monday at a function organised to announce the agriculture and rural credit policy for 2014-15 fiscal year.

Bangladesh Bank has incorporated the change in the credit ratings criteria in the policy.

The central bank assesses credit ratings of banks based on six criteria -- Capital, Assets, Management, Earnings, Liquidity and Sensitivity to Market Risk, or CAMELS in short.

Agriculture loan distribution situation has been included in ‘Management’ portion of CAMELS.

The policy says attainment of any bank’s agriculture loan disbursement target, distribution of credit at 4 percent interest rate, disbursement of loans through its own branches, and loan recovery rate will be considered for CAMELS ratings.

Bangladesh Bank Governor Atiur Rahman, deputy Zgovernors Abul Kashem and SK Sur Chowdhury, and chief executive officers of scheduled banks, among others, were present at the function.

In the policy, the central bank has fixed agriculture loan distribution target at Tk 155.5 billion for the current FY, beginning July 1.

The figure is 6.54 percent higher than the last FY’s target.