Deputy Governor of Bangladesh Bank SK Sur Chowdhury said the directive was given at a meeting with the managing directors of seven state-owned commercial and specialized banks on Monday.
State-owned banks, mainly, disburse agriculture loans and the maximum number of cases pertaining to them is, therefore, with such banks.
The managing directors said at the meeting that around 200,000 cases were pending at present, while ten thousand warrants had been issued.
Expressing concern over the existing scenario, Sur Chowdhury said, “We have instructed the state-owned commercial and specialised banks to find ways to recover the loans without filing fresh cases against defaulting farmers.”
The banks were asked not to file certificate cases against the farmers and even if such cases were to be initiated, their number had to be gradually brought down, Sur Chowdhury said.
The central bank suggested the loan-recovery mechanism be strengthened to develop a culture of loan repayment among farmers, to strengthen pre-loan disbursement scrutiny and, if needed, the rescheduling of loans.
In reply to a question, Sur Chowdhury said though there was a legal provision to file certificate case, it was the responsibility of the legislators to amend or to make the law relevant.
The PDR Act provides for filing a case if loan repayment is not made for three years.
In case of agriculture loans, a debtor becomes a defaulter one year after the expiry of the repayment term, while it is six months in case of other sectors.
“Branch managers often file cases without making any effort to recover the loans in a bid to flaunt their performance. The banks have been advised against such practices,” Sur Chowdhury said.
In reply to another question, he said the famers had been affected as the supply of their produces was disrupted due to the ongoing blockade and shutdowns.
“Not only the agriculture sector but even small, medium-scale and big industries too have been affected. In the changed-scenario, some rules would be relaxed if the need arises,” he added.