Bangladesh Krishi Bank

Bangladesh Krishi Bank (BKB) is the largest specialised national bank for promoting agricultural credit. Established in 1973 under the Bangladesh Krishi Bank Order (P.O No. 27 of 1973), the BKB is the successor to the former Agricultural Development Bank of Pakistan, which was established in 1961 through merging the Agricultural Development Finance Corporation and the Agricultural Bank of Pakistan into one institution. Initially, the authorised capital of the bank was Tk. 500 million and its paid up capital was Tk 370 million, subscribed fully by the government. Later, in view of the increased volume of banking activities and business, the authorised and paid up capital of the bank were raised to Tk 2 billion and Tk 1 billion respectively. In 2008 both the authorised and paid up capital has been raised to 3.5 billion.

Aiming at the economic development in the rural area, BKB was created for helping overall development of the agricultural sector to attain food sufficiency. Though Bangladesh Krishi Bank is a specialised bank for the agricultural sectors it operates normal banking like other commercial banks. In conjunction with its prime function of disbursing agriculture credit BKB is also involved in foreign exchange business, trade and investment finance, agro-based project financing, providing running capital to retail, wholesale and SMEs, microcredit and poverty alleviation activities. BKB played a vital role in the rehabilitation schemes operated after cyclone Sidor in 2007. For foreign exchange business BKB has 15 authorised dealing branches and correspondents arrangement with 225 overseas financial institutions. Through these branches BKB is able to reach the remittances to the beneficiaries within 3 days. 82 branches of BKB have been brought under one stop service provision scheme.

Soon after liberation, the government appointed an administrator to look after the affairs of BKB. In accordance with the provisions of the Bangladesh Krishi Bank Order, a managing director took overall charge of the bank in April 1973. In March 1975, the government constituted a board of directors for the bank and until March 1981, the managing director served as the ex-officio chairman of the board. In April 1981, two separate offices of the chairman and managing director were set up and the government appointed a non-official director as chairman of the board. The managing director continued to be the bank's chief executive. At present, the board of directors of the bank consists of 11 directors, including the chairman. The bank's head office in Dhaka has 7 departments viz., administration, credit, finance, operation, planning and recovery, audit and inspection and the international departments. Each department is headed by a general manager.

Table Basic facts and economic indicators  (in million Taka).

Indicators	2004	2005	2006	2007	2008	2009
Authorised capital	2000	2400	3000	3000	3500	15000
Paid up capital	2000	2400	3000	3000	3500	9000
Reserved Fund	1242	1305	1338	1369	1540	2060
Deposits	49700	55960	63413	66307	79517	93447
(a) Demand Deposits	4755	5408	6508	7366	7673	10351
(b) Term Deposits	44945	50552	56905	58941	71844	83096
Loans and Advance	59304	61407	70056	73286	83448	91798
Investment	1688	1719	1608	1608	1492	1512
Total Asset	87416	95284	102396	102396	117823	140816
Total income	4198	3923	4731	4731	6501	9866
Total Expenditure	5606	5767	6504	6504	8467	9741
Foreign Currency Trading	11992	20268	27620	31212	35852	45959
(a) Export	4840	5631	7568	9086	10844	13467
(b) Import	5580	12183	16772	16831	18130	22979
(c) Remittance	1572	2454	3280	5295	6878	9513
Total Manpower	10779	10617	10454	10236	10530	10313
(a) Officers	4642	4634	4501	4365	4756	4717
(b) Staff	6137	5983	5953	5871	5774	5596
Correspondents Banks	179	181	188	190	215	225
Total Branches (in numbers)	929	938	942	948	950	952
(a) In Bangladesh	929	938	942	948	950	952
Agricultural Credit
(a) Loan Disbursed	12605	12668	17600	16799	16709	17366
(b) Realised	13073	8913	14548	17873	15371	15349
Industrial Credit
(a) Loan Disbursed	3883	3988	5511	7244	7105	7964
(b) Realsied	3576	3156	4679	6771	6814	8542
Loan Outstanding by Sector
(a) Agriculture and Fisheries	36933	45393	50799	50742	56109	57175
(b) Industry	6558	6975	9079	10245	10048	9783
(c) Trade and Commerce	2647	1608	2549	2753	5715	9849
(d) Poverty Reduction	3200	2130	2207	2410	1320	3415

Source Government of Bangladesh, Ministry of Finance, Banking and Financial Institution Division, Bank o Arthik Prothisthan Samuher Karjaboli [Annual Report on Banks and Financial Institutions], 2004-05 to 2009-10.

BKB provides credit facilities to individual and corporate bodies engaged in crop production, horticulture, forestry and fisheries. It also offers financial and technical assistance to agro-based and cottage industries. Its charter requires the bank to act on commercial considerations but with due regard to the development of agriculture, and agro-based and other related industries in rural and urban areas. Under the provisions of its charter, BKB is supposed to give preference to the credit needs of small farmers and other disadvantaged groups. BKB, therefore, has to fulfill both social and economic objectives.

The bank offers short, medium, and long-term financing for production, processing, warehousing and marketing of agriculture and agro-based industrial products. Loan terms are determined by the purpose for which it is given, the gestation period, and income generating capacity. The bank provides short-term loans generally for seasonal agricultural production activities. The medium-term loans are sanctioned for acquisition of farm machinery, low lift pumps, hand pumps, agricultural implements, bullocks, carts, goats, dairy, poultry, and draft animals, transportation facilities for agricultural produces, and related development activities. Long-term loans are advanced for capital expenditures including purchase of tractors, power tillers and shallow tube wells, construction of ice plants, establishment of agro-based industries, extension of tea gardens or investment in horticulture, forestry and fisheries. Amortisation period for short-term loan is 18 months, for medium-term loans up to 5 years and for long-term loans over 5 years.

Apart from the above areas, BKB provides about Tk 14 billion annually in financing numerous projects and special programmes such as the Special Agricultural Credit Programme, and in helping contract growers of BADC, funding schemes of potato cultivation and preservation, tea plantation, and installation of hand pumps, shallow and deep tube wells, the Rural Finance Experiment Project, projects in dairy farming, poultry, fisheries, aquaculture and livestock, loans for production and marketing of tobacco, banana and cotton, the Betagi Community Forest Project, Swanirvar Bangladesh, and financing self-employment schemes of educated unemployed youths

BKB prepares annual work plan with a mission and vision to attain self-sufficiency in food through development of agriculture, producing import substitute agro products, meeting the growing demands for agricultural credit, and identifying appropriate areas for agricultural development projects to attain sustainable growth in the sector.

BKB has introduced some Small Savings Schemes for those marginal groups in addition to their normal deposit programs. BKB has launched a seven-year tenure 'Bangladesh Krishi Bank Sanchoya Scheme' in 2008. Under its social and poverty reduction strategy initiatives BKB is providing loans and banking facilities to share croppers on easy terms. [Muhammad Abdul Mazid]